By David Butler

On the 28th of August (here) I began recording Sky Sports Pundit and ex-Premier League Footballer Paul Merson’s predictions for EPL fixtures. These predictions are usually published by Sky Sports on a Friday before the weekend ties.

Given that Paul will make 380 predictions over the course of the Premier League season (70/380 to date), we have a rare opportunity to analyse the accuracy of a football pundit who systematically predicts.

We’re 7 gameweeks into the EPL season – how’s Merse getting on?

After 70 predictions he has called the correct score line 5 times, predicted the right result 32 times and has been incorrect with the result 38 times.  Paul’s pie chart is below and shows the percentages.  Quite interestingly, since I began collecting the data I've observed Merse's preferences are commonly time-inconsistent; he often reverses his Friday predictions a day later when he sits down with Geoff et al for matches on Saturday afternoon in the Sky Sports studio.

I also put the random number generator to work for all these ties, generating two numbers between 0 to 5 for each fixture to see how ‘the chimp’ gets on.  The pie chart for randomness is the second chart below. Randomness is  behind Merse when it comes to predicting the outcome (23 right, 47 wrong). In terms of estimating the score however the random number generator is only marginally behind Merse and has predicted 3 right score lines in comparison to Merson's 5.

When it comes to predicting the score line of ties it seems that randomly generating two numbers between 0-5 is not far behind (and maybe just as good as) relying on our own knowledge.

by Declan Jordan

A book I really enjoyed during my summer holiday (and would recommend highly) is Stillness and Speed by Dennis Bergkamp. It was written with David Winner, who also wrote the wonderful Brilliant Orange - The Neurotic Genius of Dutch Football. 

While watching (and supporting the Dutch at the World Cup - in part influenced by Winner's earlier book) I was struck by the reaction of TV commentators and analysts to Arjen Robben's propensity to fall in a heap at the slightest touch from a defender. Even when it was clear that Robben had been fouled he made sure the referee noticed it. 

I was reminded of a passage in Dennis Bergkamp's book:

I think there is a lot in that long quote that explains Robben's attitude and behaviour, as well the attitude and behaviour of other players and commentators. It's quite interesting to me how Bergkamp refers to 'diving' or at least 'exaggerating' in the context of doing his job properly and doing it well. It's also clear from this passage that cheating is not a black and white issue. There are cultural differences. The label of cheating is contingent on the circumstances. For example, handling the ball in the middle of the field in a mid-table league game (that may even eventually lead to a goal) is not considered cheating in the way that handling the ball in the opposition's penalty area in World Cup play-off game in Stade de France might be.

I made a presentation to the UCC Economics Society conference last February that addressed this grey area in cheating from an economic perspective. I've saved the presentation to YouTube and it can be seen below. 

The central argument I make is based on questioning an implicit assumption in the classical economic approach (attributable to Gary Becker) that sees cheating - and other crimes - as a sort of cost-benefit analysis. A potential cheater will (perhaps sub-consciously) calculate the costs of being caught (a red card or the opprobrium of fans) times the likelihood of being caught (is the ref looking). This will be weighed against the benefits of cheating (getting a penalty or stopping an opponent from scoring). This assumes though that the cheater knows each of these elements. Perhaps this is not unrealistic. On this blog we've already seen work on the cost of a red card.

However, the other assumption implicit in this approach is that the cheater knows whether the action he or she is about to take is cheating. This isn't an issue perhaps when we talk about taking down a player that's through on goal or blocking a shot on the goal line or injecting oneself with EPO. But what about something like diving or losing a game to get what one feels is a better draw in a subsequent round? Can these be agreed to be cheating? Dennis Bergkamp alludes to differences in culture between Italy and England determining whether the same actions on the pitch were cheating or not. 

A paper referred to in my presentation by Burrus, McGoldrick and Shuhmann in 2007 (subscription required) finds a difference in perceptions and self-reporting of cheating among students before and after definitions of cheating are provided. This suggests to me that a definition of cheating is needed. I suggest a distinction between cheating and gaming where cheating is the breaking of rules to gain advantage while gaming is the breaking of etiquette to gain advantage. The latter is not cheating - even if it may be unsporting. It is up to sports bodies to decide by codifying their rules what behaviour they wish to punish. They cannot then punish players who seek advantage while observing the rules set out by the sports bodies.

By David Butler

During the Winter Olympics I recalled a classic paper that explored how counterfactual thoughts impacted emotions (some days later the paper was discussed by Cass Sunstein on his blog here, again in light of Sochi). Simply put the theory is that, in terms of happiness, finishing 3rd and receiving a bronze was a better outcome than finishing 2nd.

An interesting twist on this is often suggested this time of year during the football league play-offs when I here fans argue that teams are better off finishing 6th in a league and narrowly reaching the play-offs, rather than finishing 3rd and achieving the same feat. The folk psychology goes that those finishing 3rd are disappointed for not getting promoted automatically (upward comparison), while those finishing 6th view entry to the play-offs as a lucky bonus to potentially play in the ‘most expensive game’ in football. The team that are 3rd have the added pressure of being play-off favourites while the 6th team don’t face the same expectancy levels or psychological angst of a near miss. 

I didn’t have time to collect all the data yet but from looking at the Championship/old First Division play-offs from 1992 (since it began in its current format) approximately 35% of the winners (the most) were 3rd in the league. Only 13% of the play-off winners finished 4th in the League and were the fewest.  I need to collect more data for other leagues but the story of ‘being better off finishing 6th’ at the moment, looks like one for the myth list!

More to follow.

By David Butler

Previously I considered findings relating to simulation in association football after a weekend of contentious calls in the Premier League. The evidence suggested that referees are well qualified to judge whether a footballer attempts at simulate a foul. But what about deception in other sports?  A recent paper published in the Journal of Economic Behavior & Organization available here considers the topic of simulation in basketball using data from the Israeli Basketball Super League.

The researchers look at over 500 incidents and follow the classic approach of behavioural economists; they tested to see whether decision making by players and referees relating to simulation was optimal and, if not, they ask why this was not the case and how systematic was this deviation from optimality.

The data collected suggests that deception in professional basketball is quite common and players often fall in an attempt to receive an offensive foul. It is argued however that what is believed to be a common strategy of deceiving to achieve obvious gains can actually have a negative outcome for the team. They researchers suggest that falling players do not realise the cost they are imposing on their team if a foul is not awarded. The idea is also floated that players and team’s incentives structure could be potentially misaligned (i.e. the player having specific bonuses). The authors go on to cite some of the most recent research in the area of honesty and cheating which suggests that individuals have a tendency to cheat for small personal gains but do not engage in large-scale dishonest behaviours.

The research asks an interesting question, which is especially pertinent in light of the findings; why doesn't the team or the coach instruct his players to stop simulating fouls if there are high costs imposed on the team?  Perhaps the 32 managers on their way to Brazil should turn to the Journal of Economic Behavior & Organization to get the edge! 

By David Butler - This entry is part 4 of a weeklong series to mark the release of Homer Economicus:The Simpsons and Economics.

Since the publication of Moneyball,  a book that documents the rise of the Oakland A’s under Billy Beane, the empirical study of sport has seen a notable rise in popularity. The statistical analysis of baseball, referred to as sabermetrics, was pioneered by Bill James and is a topic which the Simpsons writers dedicate an entire episode to in season 22. MoneyBart, written by Tim Long, see’s Lisa apply statistics and probability theory to engineer success for Bart’s struggling little league baseball team, the Springfield Isotot’s. 

For me, the episode not only highlights the use of sports statistics but gives a great insight into the lessons of behavioural economics. The central theme of MoneyBart is how intuition and gut reactions often mislead and result in predictions that differ from those produced by cold calculated reason.

The episode refers (perhaps unintentionally) to the psycho-fictitious drama of system 1 and system 2 thinking that behavioural economists use to theorise the brain in a simplied fashion. System 1 is deemed the automatic and quick system that helps us consider space, distance, recognise faces, act emotionally etc., while system 2 is the supervisory system that consistently helps us update our views, learn from experience and engage in conscious reasoning. These two metaphorical systems can often conflict, most often when decisions have consequences at different points in time, leading to time inconsistent preferences or self control problems.

With very little knowledge of baseball Lisa first turns to those expected to have an intuitive understanding of the game, the bar-stoolers in Moe’s. It is in the local tavarn however that she comes across professor Frink who introduces her to the statistical side of baseball and the powers of sabermetrics. Lisa instantly becomes hooked, engaging system 2 and using books such as ‘Schrodinger’s bat’ to devise a strategy for the Springfield Isotots that's based upon the laws of probability. As was the eventual case with Billy Beane's strategy with Oakland A's, Lisa's statistically inspired strategy pushes the team to the top of the league.   

It is here however where her system 2 thinking is overcome by the forces of system 1, a role unsurprisingly played by her brother Bart. Contrary to Lisa’s statistically grounded advice to play safe, Bart, believing Lisa is taking the fun out of baseball, smashes a homerun and wins the game for the team.Bart tells Lisa he was on a hot streak, but Lisa informs him that the hot hand  is a statistical illusion!  For not following the coaches orders Bart is removed from the team (despite his success), only later to be reinstated for the last play of the championship final. 

But once again Bart defies Lisa's cold logic (despite her protests) and he begins to steal bases. A furious Lisa tells Bart that it is statistically impossible to steal a home run but nevertheless Bart goes for it! On Bart’s last steal Lisa fury turns to joy as her emotions get the better of her and she falls in love with the thrills of baseball rather than the power of statistics. Bart fails in his endeavours, getting tagged out at the plate and as the commentator neatly surmises “it’s a triumph of number crunching over the human spirit”.  Lisa and Bart’s disagreements are however resolved.

The writers do a great job in presenting a balanced view of opinions on sport and stats. The power of statistical evidence in sport is weighed up against the benefits of taking sport for the emotional roller coaster that it is. Equally the statistical approach in sport is poked fun at as Proffesor Frink reveals the triviality of some statistics. As Homer suggested in an episode many years ago... “people can come up with statistics to prove anything. 14% of people know that.”

By David Butler

The sunk-cost fallacy or the ‘escalation effect’ occurs when a decision-maker holds constant or increases her commitment to a particular choice despite marginal costs exceeding marginal benefits. In a nutshell, the effect implies causality between a decision-makers irreversible past choices and the current decisions they must make.

Microeconomics textbooks stress that one should not follow sunk costs. Plainly put – we shouldn’t cry over spilled milk, it’s not getting back in the glass. As intelligent decision-makers we should consider opportunity costs…but forget about the sunk ones! The usual recommendation of the economist is that honouring sunk costs can be expensive in terms of time, money and heartache!

Since the 1970’s researchers have tested to see whether or not decision-makers follow sunk costs and various psychological studies, in particular the works of Arkes and Blumer, found evidence to support the escalation effect. Sunk costs effects have been observed in various contexts such as in wars (Lipshitz 1995) and space exploration programs (Mitroff 1974).

In 1995 the first quantitative field test of a sunk cost effect was carried out by Staw and Hoang in a sporting context to extend sunk cost research from a behavioural perspective. Their results confirmed that more highly drafted individuals in the National Basketball League received additional playing time when controlling for on-field performance. Although later papers were to reconsider the author’s findings, Staw and Hoang found that when they created a standardised measure of performance, players at the top of the draft received more playing time. Even though a coach’s draft choice was playing poorly they were often following sunk costs and still choosing the player.

Why would individuals, firms or institutions ‘throw good after bad’? Arkes and Blumer described this effect in terms of judgement error, whereby individuals believe that by not following sunk costs they are invoking further losses or underutilising previous investment. Self-Justification theory also provides a wealth of explanations for the occurrence of a sunk cost effect; if an individual is personally responsible for previous investments they may follow sunk costs to maintain self-esteem.

Sport is perhaps one of the most interesting domains to test for this effect as cold calculated decision making is something one may not always associate with a chairperson or manager!

By Robbie Butler

For the 12th time this season, I left home yesterday in search of a pub showing the live FA Cup game between Arsenal and Liverpool. In recent years, I had become somewhat spoiled. Thanks to a subscription to Sky Sports and ‘free’ access to ESPN, every Premier League and FA Cup game was available at home at the touch of a button.

I never thought I say this, but god how I miss ESPN. Kevin Keegan, Ray Stubbs, Rebecca Low, even John Barnes! That red studio setting. 5.30pm Saturday evening…the memories.

Enter BT Sport to break up this paradise.

Since the arrival of the telecom giant I have been forced to search Cork city for pubs with access to this channel. It reminds me of the early days of Sky, when literally only your ‘TV mad’ neighbours up the road, had the channel. The crazy thing about this is how irrational my behaviour appears to be.   

I refused to get BT in the summer on the grounds of cost (and principle). The cost argument doesn’t stack up. The Setanta Sports Pack (where BT Sport can be found) costs €19.99 per month. That’s a cost of roughly €120 had I ordered the channel at the start of the season or €10 approx. per game. I have spent far more on food, drink, petrol, parking, etc. over the course of my twelve ‘pub’ games since August, not to mention the time it’s taken. Completely irrational behaviour it would seem. 

So why don’t I subscribe? I don’t know really. Cost can’t be the issue. Maybe it’s principle. However, Sky Sports will tell you they don’t last very long. Maybe it’s the excuse to get out of the house and watch live football surrounded by others. Nothing better! Or maybe it’s just inertia and that I simply haven’t got around to making the call to Setanta yet.  

Whatever the answer, I appear to be contradicting one of the key principles of the field we study….people are rational! That principle might require revision.