Until I read the story, I wasn't sure how to parse this AP headline: Heart Transplant Survivor Gets Shot at US Open
It turns out the headline means the golfer Erik Compton got _a_ shot at playing in the Open. He's a survivor of two heart transplants who wants to make a living playing golf. He's one of 156 players in possession of what he calls a Golden Ticket -- a tee time this week at Pebble Beach to play in the U.S. Open."
Showing posts with label sports. Show all posts
Showing posts with label sports. Show all posts
Monday, June 14, 2010
Sunday, June 6, 2010
The market for young soccer players
The NY Times Sunday Magazine reports on How a Soccer Star Is Made . (Shades of both Harry Potter and Ender's Game...)
"The youth academy of the famed dutch soccer club Ajax is grandiosely called De Toekomst — The Future. ...Ajax once fielded one of the top professional teams in Europe. With the increasing globalization of the sport, which has driven the best players to richer leagues in England, Germany, Italy and Spain, the club has become a different kind of enterprise — a talent factory. It manufactures players and then sells them, often for immense fees, on the world market.
...
"Like other professional clubs in Europe and around the world, Ajax operates something similar to a big-league baseball team’s minor-league system — but one that reaches into early childhood. ... for some families, the first time they realize their boys are under serious consideration is when a letter arrives from Ajax requesting that they bring their sons in for a closer look, an invitation that is almost never declined.
...
"Ajax puts young players into a competitive caldron, a culture of constant improvement in which they either survive and advance or are discarded. It is not what most would regard as a child-friendly environment, but it is one that sorts out the real prodigies — those capable of playing at an elite international level — from the merely gifted.
...
"About 200 players train at De Toekomst at any given time, from ages 7 to 19. (All are male; Ajax has no girls’ program.) Every year, some in each age group are told they cannot return the following year — they are said to have been “sent away” — and new prospects are enrolled in their place.
...
"I asked Martin Jol, the coach of Ajax’s first team, if it was difficult for him to nurture young players knowing he would lose them just as their talent blossomed. “I think that is the purpose of Ajax, to develop players and bring them up to the first team as young as possible,” he answered. “And then we sell them, not for peanuts but for a lot of money.”
...
"In the U.S., we think of money as corrupting sport, especially youth sport. At Ajax, it is clarifying. With the stakes so high — so much invested and the potential for so much in return — De Toekomst is a laboratory for turning young boys into high-impact performers in the world’s most popular game. "
...
"Parents pay nothing except a nominal insurance fee of 12 euros a year, and the club covers the rest — salaries for 24 coaches, travel to tournaments, uniforms and gear for the players and all other costs associated with running a vast facility. Promising young players outside the Ajax catchment area usually attend academies run by other Dutch professional clubs, where the training is also free, as it is in much of the rest of the soccer-playing world for youths with pro potential. (The U.S., where the dominant model is “pay to play” — the better an athlete, the more money a parent shells out — is the outlier.)
" How the U.S. develops its most promising young players is not just different from what the Netherlands and most elite soccer nations do — on fundamental levels, it is diametrically opposed.
Americans like to put together teams, even at the Pee Wee level, that are meant to win. The best soccer-playing nations build individual players, ones with superior technical skills who later come together on teams the U.S. struggles to beat. In a way, it is a reversal of type. Americans tend to think of Europeans as collectivists and themselves as individualists. But in sports, it is the opposite. The Europeans build up the assets of individual players. Americans underdevelop the individual, although most of the volunteers who coach at the youngest level would not be cognizant of that.
...
"De Toekomst is not where you come to hear a romantic view of sport. No one pretends that its business is other than what it is. “We sold Wesley Sneijder for a ridiculous amount of money,” Versloot said. “We can go on for years based on what he was sold for.”
...
"Versloot said that, on average, one and a half products of De Toekomst per season will rise to the first team and go on to a significant, well-compensated pro career. Some of the others will gravitate to second- or third-tier pro circuits or the high amateur ranks in the Netherlands, where the best players make “black money,” under-the-table payments. The pressure to emerge from the academy as one of its top products — and to produce them — is immense. “It is always a very tense atmosphere here, for everyone,” Versloot said. “You have to just get used to it.”
...
"Fulham, like Ajax, is often a seller of talent. It recently sold a 20-year-old to Manchester United for seven million pounds, or more than $10 million. “It’s a little ugly talking about the financial terms,” Jennings said. “I don’t like to do it. It feels not too far off from the slave trade."
"The youth academy of the famed dutch soccer club Ajax is grandiosely called De Toekomst — The Future. ...Ajax once fielded one of the top professional teams in Europe. With the increasing globalization of the sport, which has driven the best players to richer leagues in England, Germany, Italy and Spain, the club has become a different kind of enterprise — a talent factory. It manufactures players and then sells them, often for immense fees, on the world market.
...
"Like other professional clubs in Europe and around the world, Ajax operates something similar to a big-league baseball team’s minor-league system — but one that reaches into early childhood. ... for some families, the first time they realize their boys are under serious consideration is when a letter arrives from Ajax requesting that they bring their sons in for a closer look, an invitation that is almost never declined.
...
"Ajax puts young players into a competitive caldron, a culture of constant improvement in which they either survive and advance or are discarded. It is not what most would regard as a child-friendly environment, but it is one that sorts out the real prodigies — those capable of playing at an elite international level — from the merely gifted.
...
"About 200 players train at De Toekomst at any given time, from ages 7 to 19. (All are male; Ajax has no girls’ program.) Every year, some in each age group are told they cannot return the following year — they are said to have been “sent away” — and new prospects are enrolled in their place.
...
"I asked Martin Jol, the coach of Ajax’s first team, if it was difficult for him to nurture young players knowing he would lose them just as their talent blossomed. “I think that is the purpose of Ajax, to develop players and bring them up to the first team as young as possible,” he answered. “And then we sell them, not for peanuts but for a lot of money.”
...
"In the U.S., we think of money as corrupting sport, especially youth sport. At Ajax, it is clarifying. With the stakes so high — so much invested and the potential for so much in return — De Toekomst is a laboratory for turning young boys into high-impact performers in the world’s most popular game. "
...
"Parents pay nothing except a nominal insurance fee of 12 euros a year, and the club covers the rest — salaries for 24 coaches, travel to tournaments, uniforms and gear for the players and all other costs associated with running a vast facility. Promising young players outside the Ajax catchment area usually attend academies run by other Dutch professional clubs, where the training is also free, as it is in much of the rest of the soccer-playing world for youths with pro potential. (The U.S., where the dominant model is “pay to play” — the better an athlete, the more money a parent shells out — is the outlier.)
" How the U.S. develops its most promising young players is not just different from what the Netherlands and most elite soccer nations do — on fundamental levels, it is diametrically opposed.
Americans like to put together teams, even at the Pee Wee level, that are meant to win. The best soccer-playing nations build individual players, ones with superior technical skills who later come together on teams the U.S. struggles to beat. In a way, it is a reversal of type. Americans tend to think of Europeans as collectivists and themselves as individualists. But in sports, it is the opposite. The Europeans build up the assets of individual players. Americans underdevelop the individual, although most of the volunteers who coach at the youngest level would not be cognizant of that.
...
"De Toekomst is not where you come to hear a romantic view of sport. No one pretends that its business is other than what it is. “We sold Wesley Sneijder for a ridiculous amount of money,” Versloot said. “We can go on for years based on what he was sold for.”
...
"Versloot said that, on average, one and a half products of De Toekomst per season will rise to the first team and go on to a significant, well-compensated pro career. Some of the others will gravitate to second- or third-tier pro circuits or the high amateur ranks in the Netherlands, where the best players make “black money,” under-the-table payments. The pressure to emerge from the academy as one of its top products — and to produce them — is immense. “It is always a very tense atmosphere here, for everyone,” Versloot said. “You have to just get used to it.”
...
"Fulham, like Ajax, is often a seller of talent. It recently sold a 20-year-old to Manchester United for seven million pounds, or more than $10 million. “It’s a little ugly talking about the financial terms,” Jennings said. “I don’t like to do it. It feels not too far off from the slave trade."
"Everyone draws the line somewhere. Jennings told me that he recently received a call from a rival club asking if it could schedule a game against his “elite 5s” — 5-year-olds. He replied, “We don’t have elite 5s, but we’ll play your expectant mothers.”
...
"Ronald de Jong invited me to go scouting with him one Saturday. He had his eye on a specific target — “a 2004,” he said, referring to a birth year. A 5-year-old whom he had seen and was checking in with every month or so. This boy might not even be in school yet, I pointed out. “I don’t think he is,” de Jong said with a slight smile, as if he recognized the absurdity. “I believe he’s in day care.”
Thursday, April 22, 2010
The WSJ on the football draft and market design
Writing in the Sports section of the Wall Street Journal, Reed Albergotti considers the NFL player draft, and some possible alternatives.
Why the NFL Draft Drives Economists Crazy
Fixed Costs, Variable Talent and Changes in the College Game Make Big Mistakes Unavoidable; Time for an Auction?
In an accompanying graphic, he writes "Harvard researchers Lucas Coffman, Itai Ashlagi, and Itay Fainmesser came up with an alternative based on an idea called a simultaneous ascending auction."
Along the way, the article has some nice things to say about market design.
"Thanks to market design, medical-school students are matched with hospitals through a complicated computer algorithm. Governments use "communal auctions" to distribute things like cellular bandwidth to telecommunications companies. Even the New York City public schools have used market economics to ensure parity in its school-choice system. "
...
"Three researchers at Harvard Business School—who studied under Alvin Roth, a Harvard professor and a pioneer in market-design theory—have proposed an alternative to the NFL draft.
Under their plan, all 32 teams would be given seven picks. They would have to abide by a spending cap that would go higher to lower—with the worst team (based on its record the previous season) having the most money to spend. When the bidding opened, the most sought-after players would draw multiple bids. Teams could then raise their bid as high as they'd like for a player they coveted.
Theoretically, a team could get any player it wanted—so long as it was prepared to pinch pennies on everyone else. Meanwhile, a team that didn't want to break the bank on any particular player could pick up lots of useful parts by spreading its money around evenly. Teams could also thrive by focusing on the bidding and looking for bargains.
"I think that it would significantly help teams get the right guys," said Lucas Coffman, one of the study's authors. If nothing else, Mr. Coffman said, the auction format might be more exciting than the draft, which allows for long gaps between picks.
In any case, there's some evidence the draft could be the next fix for a league that fixes everything. One NFL executive said patience is running thin. "There's a huge trail littered with guys who got the big dollars but were a bust," this person said."
Postscript: Luke Coffman, Itai Ashlagi, and Itay Fainmesser were all on a differently organized labor market this year, and will be at Ohio State, MIT Sloan, and Brown next year.
For another take on the design of the NFL labor market, by another recent Harvard grad Gregor Matvos, see his paper "Renegotiation Design: Evidence from NFL roster bonuses."
Update: Luke Coffman points out that the allocation of tickets to attend tonight's NFL draft could use some market design, and he points me to this, on Craigslist.
Experienced line sitter available to get tickets for NFL Draft - $75 (Midtown)
"I am an experienced line sitter who has worked many events. I am always on line early to secure tickets. I will be available to stand in line for tickets for the 1st 2 nights of the NFL Draft at Radio City Music hall. The procedure is as follows I will line up the evening before to get my wristband and will be back on line in order to get the tickets at 5:15 the day of the draft. The gates at Radio City will open at 6 p.m. each night. My charge for this service is $75 per ticket I can also bring people with me to secure extra tickets if you need more than 1, Please reply with the night(S) you want tickets for and how many tickets you need. Round 1 will be held Thursday night April 22nd and rounds 2-3 will be held Friday April 23rd. "
Why the NFL Draft Drives Economists Crazy
Fixed Costs, Variable Talent and Changes in the College Game Make Big Mistakes Unavoidable; Time for an Auction?
In an accompanying graphic, he writes "Harvard researchers Lucas Coffman, Itai Ashlagi, and Itay Fainmesser came up with an alternative based on an idea called a simultaneous ascending auction."
Along the way, the article has some nice things to say about market design.
"Thanks to market design, medical-school students are matched with hospitals through a complicated computer algorithm. Governments use "communal auctions" to distribute things like cellular bandwidth to telecommunications companies. Even the New York City public schools have used market economics to ensure parity in its school-choice system. "
...
"Three researchers at Harvard Business School—who studied under Alvin Roth, a Harvard professor and a pioneer in market-design theory—have proposed an alternative to the NFL draft.
Under their plan, all 32 teams would be given seven picks. They would have to abide by a spending cap that would go higher to lower—with the worst team (based on its record the previous season) having the most money to spend. When the bidding opened, the most sought-after players would draw multiple bids. Teams could then raise their bid as high as they'd like for a player they coveted.
Theoretically, a team could get any player it wanted—so long as it was prepared to pinch pennies on everyone else. Meanwhile, a team that didn't want to break the bank on any particular player could pick up lots of useful parts by spreading its money around evenly. Teams could also thrive by focusing on the bidding and looking for bargains.
"I think that it would significantly help teams get the right guys," said Lucas Coffman, one of the study's authors. If nothing else, Mr. Coffman said, the auction format might be more exciting than the draft, which allows for long gaps between picks.
In any case, there's some evidence the draft could be the next fix for a league that fixes everything. One NFL executive said patience is running thin. "There's a huge trail littered with guys who got the big dollars but were a bust," this person said."
Postscript: Luke Coffman, Itai Ashlagi, and Itay Fainmesser were all on a differently organized labor market this year, and will be at Ohio State, MIT Sloan, and Brown next year.
For another take on the design of the NFL labor market, by another recent Harvard grad Gregor Matvos, see his paper "Renegotiation Design: Evidence from NFL roster bonuses."
Update: Luke Coffman points out that the allocation of tickets to attend tonight's NFL draft could use some market design, and he points me to this, on Craigslist.
Experienced line sitter available to get tickets for NFL Draft - $75 (Midtown)
"I am an experienced line sitter who has worked many events. I am always on line early to secure tickets. I will be available to stand in line for tickets for the 1st 2 nights of the NFL Draft at Radio City Music hall. The procedure is as follows I will line up the evening before to get my wristband and will be back on line in order to get the tickets at 5:15 the day of the draft. The gates at Radio City will open at 6 p.m. each night. My charge for this service is $75 per ticket I can also bring people with me to secure extra tickets if you need more than 1, Please reply with the night(S) you want tickets for and how many tickets you need. Round 1 will be held Thursday night April 22nd and rounds 2-3 will be held Friday April 23rd. "
Monday, April 12, 2010
Unpaid workers: athletes and interns
Several blogs and news stories follow unpaid parts of the labor force, college athletes and student interns.
For Love of The Game (And The Money) from The Faculty Lounge by Kim Krawiec and Against the NCAA Cartel from The Volokh Conspiracy by Ilya Somin both consider the unpaid status of college athletes. The latter story explicitly mentions the high salaries of college coaches in basketball and football to indicate that these are profit making entertainment businesses despite the fact that the workers/players/students are unpaid.
There has also been a good deal of attention to the recent NY Times story headlined Growth of Unpaid Internships May Be Illegal, Officials Say
"With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor. "...
"Ms. Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid. Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer “derives no immediate advantage” from the intern’s activities — in other words, it’s largely a benevolent contribution to the intern.
No one keeps official count of how many paid and unpaid internships there are, but Lance Choy, director of the Career Development Center at Stanford University, sees definitive evidence that the number of unpaid internships is mushrooming — fueled by employers’ desire to hold down costs and students’ eagerness to gain experience for their résumés. Employers posted 643 unpaid internships on Stanford’s job board this academic year, more than triple the 174 posted two years ago.
In 2008, the National Association of Colleges and Employers found that 83 percent of graduating students had held internships, up from 9 percent in 1992. This means hundreds of thousands of students hold internships each year; some experts estimate that one-fourth to one-half are unpaid. "
Some regulatory guidance from California: California Labor Dept. Revises Guidelines on When Interns Must Be Paid
"Many wage and hour regulators maintain that interns must be paid if their work is of “immediate advantage” to the employer, but the California agency’s top lawyer advised that such an advantage can be offset — and the intern not be paid — if the employer provides close supervision and lays out money for training.
Over all, the guidance from the California Division of Labor Standards Enforcement was emphatic that for internships to be unpaid, they must be educational and predominantly for the benefit of the intern, not the employer. "
Some of these discussions have something in common with the discussions in the transplant community about compensation for donors.
For Love of The Game (And The Money) from The Faculty Lounge by Kim Krawiec and Against the NCAA Cartel from The Volokh Conspiracy by Ilya Somin both consider the unpaid status of college athletes. The latter story explicitly mentions the high salaries of college coaches in basketball and football to indicate that these are profit making entertainment businesses despite the fact that the workers/players/students are unpaid.
There has also been a good deal of attention to the recent NY Times story headlined Growth of Unpaid Internships May Be Illegal, Officials Say
"With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor. "...
"Ms. Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid. Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer “derives no immediate advantage” from the intern’s activities — in other words, it’s largely a benevolent contribution to the intern.
No one keeps official count of how many paid and unpaid internships there are, but Lance Choy, director of the Career Development Center at Stanford University, sees definitive evidence that the number of unpaid internships is mushrooming — fueled by employers’ desire to hold down costs and students’ eagerness to gain experience for their résumés. Employers posted 643 unpaid internships on Stanford’s job board this academic year, more than triple the 174 posted two years ago.
In 2008, the National Association of Colleges and Employers found that 83 percent of graduating students had held internships, up from 9 percent in 1992. This means hundreds of thousands of students hold internships each year; some experts estimate that one-fourth to one-half are unpaid. "
Some regulatory guidance from California: California Labor Dept. Revises Guidelines on When Interns Must Be Paid
"Many wage and hour regulators maintain that interns must be paid if their work is of “immediate advantage” to the employer, but the California agency’s top lawyer advised that such an advantage can be offset — and the intern not be paid — if the employer provides close supervision and lays out money for training.
Over all, the guidance from the California Division of Labor Standards Enforcement was emphatic that for internships to be unpaid, they must be educational and predominantly for the benefit of the intern, not the employer. "
Some of these discussions have something in common with the discussions in the transplant community about compensation for donors.
Tuesday, February 16, 2010
Girls and the Little League
An obituary of Judge Sylvia Pressler reminds us of some recent history: NJ Judge Who Opened Little League to Girls Dies
"While serving as a hearing examiner with New Jersey's Division on Civil Rights, Pressler ruled that a 12-year-old northern New Jersey girl should have been allowed to play on a Little League team.
''The institution of Little League is as American as the hot dog and apple pie,'' Pressler wrote in a sharply worded opinion. ''There is no reason why that part of Americana should be withheld from girls.''
The ruling was decried by Little League as ''conceived in vindictive and prejudicial fashion of the worst kind,'' but it was upheld on appeal, and New Jersey became the first state to bar sex discrimination in Little League.
By the following year, Little League amended its charter to allow girls and also created a softball division."
...
"The Little League case reached Pressler in 1973. Maria Pepe, a 12-year-old Hoboken resident, had played three games for her Little League team the year before but stopped when Little League's national office threatened to revoke the league's charter. The National Organization for Women filed a lawsuit on her behalf.
Pressler said his wife didn't consider the Little League case one of her more difficult decisions, despite its ramifications and the publicity surrounding it.
''It was an important case because of its timing,'' he said. ''But it was perfectly obvious to her that they were completely cockeyed in barring girls if they were physically able.'' "
"While serving as a hearing examiner with New Jersey's Division on Civil Rights, Pressler ruled that a 12-year-old northern New Jersey girl should have been allowed to play on a Little League team.
''The institution of Little League is as American as the hot dog and apple pie,'' Pressler wrote in a sharply worded opinion. ''There is no reason why that part of Americana should be withheld from girls.''
The ruling was decried by Little League as ''conceived in vindictive and prejudicial fashion of the worst kind,'' but it was upheld on appeal, and New Jersey became the first state to bar sex discrimination in Little League.
By the following year, Little League amended its charter to allow girls and also created a softball division."
...
"The Little League case reached Pressler in 1973. Maria Pepe, a 12-year-old Hoboken resident, had played three games for her Little League team the year before but stopped when Little League's national office threatened to revoke the league's charter. The National Organization for Women filed a lawsuit on her behalf.
Pressler said his wife didn't consider the Little League case one of her more difficult decisions, despite its ramifications and the publicity surrounding it.
''It was an important case because of its timing,'' he said. ''But it was perfectly obvious to her that they were completely cockeyed in barring girls if they were physically able.'' "
Saturday, January 30, 2010
College football and the BCS as a political football
The WSJ reports today: U.S. May Examine College Footbal Bowl System
"Sen. Orrin Hatch (R.-Utah) said he received a letter from the Justice Department, in which it "outlined the inequities" of the BCS system and said that it is considering whether to investigate the BCS under the antitrust laws. The letter also said that the administration is exploring other options to address college football's postseason, including encouraging the NCAA to take control and asking the Federal Trade Commission to examine the BCS's legality under consumer-proteciton laws.
Shortly after he was elected in November 2008, Barack Obama said he would "throw my weight around a little bit" regarding college football's lack of playoff system. Currently, the BCS stages a national title game between the two teams that finish atop a compilation of polls, while other arguably deserving teams often get excluded. Mr. Hatch, whose home-state Utah Utes were left out following the 2008 season despite a perfect record, has been advocating for changes, too, writing a letter to the president in October asking for an antitrust investigation."
The article goes on to quote the BCS director as saying we've seen this before: ""There is much less to this letter than meets the eye," Mr. Hancock said. "The White House knows that with all the serious issues facing the country, the last thing they should do is increase the deficit by spending money to investigate how the college football playoffs are played. With all due respect to Sen. Hatch, he is overstating the importance of the letter he received from the Office of Legislative Affairs." "
Here are my previous posts on the BCS and the serious business of college football.
"Sen. Orrin Hatch (R.-Utah) said he received a letter from the Justice Department, in which it "outlined the inequities" of the BCS system and said that it is considering whether to investigate the BCS under the antitrust laws. The letter also said that the administration is exploring other options to address college football's postseason, including encouraging the NCAA to take control and asking the Federal Trade Commission to examine the BCS's legality under consumer-proteciton laws.
Shortly after he was elected in November 2008, Barack Obama said he would "throw my weight around a little bit" regarding college football's lack of playoff system. Currently, the BCS stages a national title game between the two teams that finish atop a compilation of polls, while other arguably deserving teams often get excluded. Mr. Hatch, whose home-state Utah Utes were left out following the 2008 season despite a perfect record, has been advocating for changes, too, writing a letter to the president in October asking for an antitrust investigation."
The article goes on to quote the BCS director as saying we've seen this before: ""There is much less to this letter than meets the eye," Mr. Hancock said. "The White House knows that with all the serious issues facing the country, the last thing they should do is increase the deficit by spending money to investigate how the college football playoffs are played. With all due respect to Sen. Hatch, he is overstating the importance of the letter he received from the Office of Legislative Affairs." "
Here are my previous posts on the BCS and the serious business of college football.
Monday, January 4, 2010
Recruitment of male high school athletes by ... girls
Inside Higher Ed reports: "A string of scandals involving alcohol, sex and male high school sports stars -- and the National Collegiate Athletic Association's adoption of new rules in 2004 -- seemed to put a stop to college teams’ decades-old practice of organizing groups of female students whose goal was to charm prospects into choosing their university. "
At some schools, recruiting groups are now co-ed. But has this really changed anything?
"At Texas A&M University, membership in the Aggie Hostesses is open to male students, but neither the name nor the fact that the group is all-female makes it particularly appealing to male applicants. Lindsey Bounds, a 2008 graduate of Texas A&M who is the group’s head coordinator, said “men can try out” for the group, but none have, and she has heard no criticism of its gender breakdown. “I don’t feel like anyone really notices it’s an all-female group.” "
At some schools, recruiting groups are now co-ed. But has this really changed anything?
"At Texas A&M University, membership in the Aggie Hostesses is open to male students, but neither the name nor the fact that the group is all-female makes it particularly appealing to male applicants. Lindsey Bounds, a 2008 graduate of Texas A&M who is the group’s head coordinator, said “men can try out” for the group, but none have, and she has heard no criticism of its gender breakdown. “I don’t feel like anyone really notices it’s an all-female group.” "
Friday, November 6, 2009
Peer effects in learning and teaching, but not in golf
The October '09 issue of the American Economic Journal: Applied Economics contains three papers on peer effects.* The first of these begins "Is an employee's productivity influenced by the productivity of his or her nearby co-workers? The answer to this question is important for the optimal organization of labor...and for the optimal design of incentives." It then goes on to say that it detects no such effects from the random groupings of golfers in professional golf tournaments.
The second paper does find peer effects in random groupings of cadets at West Point, and the third paper finds that students do better when their teachers have better colleagues, i.e. they find that the teachers experience peer effects as measured by the performance of their students.
*The three papers are:
"Peer effects in the workplace: Evidence from random groupings in professional golf tournaments," by Jonathan Guryan, Kory Kroft, and Matthew J. Notowidigdo.
"The Effects of Peer Group Heterogeneity on the Production of Human Capital at West Point," by David S. Lyle.
"Teaching Students and Teaching Each Other: The Importance of Peer Learning for Teachers," by C. Kirabo Jackson and Elias Bruegmann.
The second paper does find peer effects in random groupings of cadets at West Point, and the third paper finds that students do better when their teachers have better colleagues, i.e. they find that the teachers experience peer effects as measured by the performance of their students.
*The three papers are:
"Peer effects in the workplace: Evidence from random groupings in professional golf tournaments," by Jonathan Guryan, Kory Kroft, and Matthew J. Notowidigdo.
"The Effects of Peer Group Heterogeneity on the Production of Human Capital at West Point," by David S. Lyle.
"Teaching Students and Teaching Each Other: The Importance of Peer Learning for Teachers," by C. Kirabo Jackson and Elias Bruegmann.
Thursday, October 1, 2009
Further unraveling of basketball recruiting
Zhenyu Lai, a graduate student in Economics at Harvard, who is taking Market Design this semester, sent me the following email, which he gave me permission to reproduce below.
After last friday's class discussion on unravelling in markets, I came across this article about unravelling in NCAA basketball with a ton of good quotes and anecdotes.
What is particularly interesting is about the role played by agents. Increasingly, agents try to form relationships with potential NBA players early on in their college careers. And they're not just targeting the surefire stars, but gambling on marginal prospects.
Interesting excerpts:
1. Technological improvements aid unravelling markets. Agents are using facebook to make contact with players early.
2. Official rules are abused. Similar to the market example on clinical psychologists, looking at the NCAA rules for agent recruiting is very indicative of the unraveling problem. "Agents are free to contact players in high school or in college through social networking sites, on the phone or in person. As long as there is no written agreement or money exchanged, an agent or a representative of an agent can form a relationship with a player, his family and/or his handlers." An agent is quoted, "It's not breaking the rules. You're just building a relationship with a potential client down the road.". The columnist describes this as "the new normal in amateur basketball."
3. Coaches are in on it too. Much like the market for law clerks, agents (aka judges) develop relationship with coaches (aka law school deans) to ensure that they are making "a sound investment" on their prospect. However, coaches are getting ticked off. The "right way" to do this is apparently for the agents to approach the coach and the player's parents first, not to directly add the player on facebook, where the player may then bypass the coach completely.
4. Agent's argument for unravelling. "Domantay's argument for an agent's trying to make inroads in a profession dominated by an elite few is that if he were to wait until a college player's senior year, he becomes just another name on the list."
5. Argument that unraveling is bad. "If an agent contacts a kid directly, then there should be repercussions. Guys get in with kids and prey on the youthfulness and financial backgrounds and offer things to lock them in and set up a potential for blackmail: If I gave you this, then you owe me." Agents are using runners to form relationships with kids early and leveraging on family contacts and relationships. There is an aura of suspicion where high school kids are wary of who to trust.
6. Agent's motivation for promoting unraveling. "Whoever can control the kid can control the revenue stream -- [maybe] it's a kid going to college benefiting the college coach and leading to a better job. the player dictates the revenue. Everybody is trying to get in sooner and sooner however they can."
Interestingly, the columnist ends off with this quote which is filled with a tone of finality that unraveling is inevitable and an enduring legacy of capitalism,
"The pool of talent, with leagues all over the globe to fill and money to be made, means that anybody with potential is in play to be courted, and so too are their families, their friends, and their AAU and high school coaches. That's the new reality for college coaches. And there's no reason to think it will ever change back."
My thoughts on unraveling in college basketball:
1. High school students are usually at an impressionable age and easily influenced by people close to them, prompting this 'unraveling' process of agents trying to get close to them. While high school students might not be expected to make savvy long-term agent decisions, more needs to be done to make the agent seem like the "bad guy" for approaching the student early. No binding contract is allowed, and kids are empowered to change agents anytime. However, especially if the agent has some influence on a family member (or is a family member..), severing an agent relationship might be tricky. To discourage unraveling, there needs to be lower barriers to changing agents.
2. The NCAA doesn't have jurisdiction over agents (like in the case of federal judges), but some states do where a law states that there can be "significant damage resulting from the impermissible and often times illegal practices of some athlete agents. Violations of NCAA agent legislation impact the eligibility of student-athletes for further participation in NCAA competition". This law is passed in 38 states. However, this law affects the athletes and not the agents. One remedy would be for the NBA to revoke the right of agents to represent their clients if a recruiting violation is found. Agent's licenses could be subject to yearly review. Entry into the agent profession could be tightly regulated.
3. Perhaps NBA draftees could attend an "agent convention" where they could interview various representatives and have the right to choose from among them without any pressure. If it were a standard practice to be connected with legitimate agents only after you enter the NBA, players would then in no way be obliged to sign with an agent early even if they were to have already accepted illegal gifts.
After last friday's class discussion on unravelling in markets, I came across this article about unravelling in NCAA basketball with a ton of good quotes and anecdotes.
What is particularly interesting is about the role played by agents. Increasingly, agents try to form relationships with potential NBA players early on in their college careers. And they're not just targeting the surefire stars, but gambling on marginal prospects.
Interesting excerpts:
1. Technological improvements aid unravelling markets. Agents are using facebook to make contact with players early.
2. Official rules are abused. Similar to the market example on clinical psychologists, looking at the NCAA rules for agent recruiting is very indicative of the unraveling problem. "Agents are free to contact players in high school or in college through social networking sites, on the phone or in person. As long as there is no written agreement or money exchanged, an agent or a representative of an agent can form a relationship with a player, his family and/or his handlers." An agent is quoted, "It's not breaking the rules. You're just building a relationship with a potential client down the road.". The columnist describes this as "the new normal in amateur basketball."
3. Coaches are in on it too. Much like the market for law clerks, agents (aka judges) develop relationship with coaches (aka law school deans) to ensure that they are making "a sound investment" on their prospect. However, coaches are getting ticked off. The "right way" to do this is apparently for the agents to approach the coach and the player's parents first, not to directly add the player on facebook, where the player may then bypass the coach completely.
4. Agent's argument for unravelling. "Domantay's argument for an agent's trying to make inroads in a profession dominated by an elite few is that if he were to wait until a college player's senior year, he becomes just another name on the list."
5. Argument that unraveling is bad. "If an agent contacts a kid directly, then there should be repercussions. Guys get in with kids and prey on the youthfulness and financial backgrounds and offer things to lock them in and set up a potential for blackmail: If I gave you this, then you owe me." Agents are using runners to form relationships with kids early and leveraging on family contacts and relationships. There is an aura of suspicion where high school kids are wary of who to trust.
6. Agent's motivation for promoting unraveling. "Whoever can control the kid can control the revenue stream -- [maybe] it's a kid going to college benefiting the college coach and leading to a better job. the player dictates the revenue. Everybody is trying to get in sooner and sooner however they can."
Interestingly, the columnist ends off with this quote which is filled with a tone of finality that unraveling is inevitable and an enduring legacy of capitalism,
"The pool of talent, with leagues all over the globe to fill and money to be made, means that anybody with potential is in play to be courted, and so too are their families, their friends, and their AAU and high school coaches. That's the new reality for college coaches. And there's no reason to think it will ever change back."
My thoughts on unraveling in college basketball:
1. High school students are usually at an impressionable age and easily influenced by people close to them, prompting this 'unraveling' process of agents trying to get close to them. While high school students might not be expected to make savvy long-term agent decisions, more needs to be done to make the agent seem like the "bad guy" for approaching the student early. No binding contract is allowed, and kids are empowered to change agents anytime. However, especially if the agent has some influence on a family member (or is a family member..), severing an agent relationship might be tricky. To discourage unraveling, there needs to be lower barriers to changing agents.
2. The NCAA doesn't have jurisdiction over agents (like in the case of federal judges), but some states do where a law states that there can be "significant damage resulting from the impermissible and often times illegal practices of some athlete agents. Violations of NCAA agent legislation impact the eligibility of student-athletes for further participation in NCAA competition". This law is passed in 38 states. However, this law affects the athletes and not the agents. One remedy would be for the NBA to revoke the right of agents to represent their clients if a recruiting violation is found. Agent's licenses could be subject to yearly review. Entry into the agent profession could be tightly regulated.
3. Perhaps NBA draftees could attend an "agent convention" where they could interview various representatives and have the right to choose from among them without any pressure. If it were a standard practice to be connected with legitimate agents only after you enter the NBA, players would then in no way be obliged to sign with an agent early even if they were to have already accepted illegal gifts.
Friday, September 25, 2009
Common deadlines
One way to try to control unraveling of transaction dates is to specify, and try to enforce, particular times at which certain aspects of a market are allowed to unfold. Some examples:
National Letter of Intent for college athletic recruits: A Quick Reference Guide to the NLI
My favorite is the April 15 resolution by the Council of Graduate Schools, signed by most universities, which is carefully designed to be fairly self-enforcing:
"Students are under no obligation to respond to offers of financial support prior to April 15; earlier deadlines for acceptance of such offers violate the intent of this Resolution. In those instances in which a student accepts an offer before April 15, and subsequently desires to withdraw that acceptance, the student may submit in writing a resignation of the appointment at any time through April 15. ... It is further agreed by the institutions and organizations subscribing to the above Resolution that a copy of this Resolution should accompany every scholarship, fellowship, traineeship, and assistantship offer."
Note that the incentive to violate the agreement by insisting that applicants respond before April 15 is undercut by the fact that the resolution allows students to accept such offers, and then subsequently reject them if they get a better offer. That is, the resolution effectively de-fuses Exploding offers by making them non-binding.
National Letter of Intent for college athletic recruits: A Quick Reference Guide to the NLI
NALP Principles and Standards for hiring by law firms: PART V: GENERAL STANDARDS FOR THE TIMING OF OFFERS AND DECISIONS "Employers offering full-time positions to commence following graduation to candidates not previously employed by them should leave those offers open for at least 45 days following the date of the offer letter or until December 30, whichever comes first. Offers made after December 15 for full-time positions to commence following graduation should remain open for at least two weeks after the date of the offer letter. "
It turns out that this provision needs some enforcement in a recession. The AmLaw Daily reports: S&C vs. Harvard and the Relevance of NALP's 45-Day Rule
"Perhaps nothing epitomizes the anxiety of this recruiting season better than Sullivan & Cromwell's abandoned attempt to bypass a standard, set by NALP, that firms leave offers to students open for up to 45 days. In late July, S&C called several of the nation's top law schools and informed career services personnel at those schools that the firm would not be following the 45-day guideline, according to six sources with direct knowledge of the situation. All six spoke only on the condition that they not be identified publicly. Instead, S&C told the career services personnel, the firm would require prospects to respond yes or no in two weeks."... "S&C backed down quickly and promised to obey the 45-day standard, according to all six sources who spoke to us about the matter. But that doesn't mean the 45-day guideline is set in stone. James Leipold, executive director at NALP, says several firms (none of which he would name) have called the organization asking if they could skip the 45-day rule in some way this season. Several have asked for permission to keep offers open for 45 days or until they collect as many acceptances as they want--whichever comes first. "
My favorite is the April 15 resolution by the Council of Graduate Schools, signed by most universities, which is carefully designed to be fairly self-enforcing:
"Students are under no obligation to respond to offers of financial support prior to April 15; earlier deadlines for acceptance of such offers violate the intent of this Resolution. In those instances in which a student accepts an offer before April 15, and subsequently desires to withdraw that acceptance, the student may submit in writing a resignation of the appointment at any time through April 15. ... It is further agreed by the institutions and organizations subscribing to the above Resolution that a copy of this Resolution should accompany every scholarship, fellowship, traineeship, and assistantship offer."
Note that the incentive to violate the agreement by insisting that applicants respond before April 15 is undercut by the fact that the resolution allows students to accept such offers, and then subsequently reject them if they get a better offer. That is, the resolution effectively de-fuses Exploding offers by making them non-binding.
Wednesday, September 23, 2009
The market for college athletes
Putting the Amateur Myth to Rest by Allen L. Sack
"I agree with Brand that the term amateur is not a good fit for modern college sports, but it has definitely not outlived it usefulness for the NCAA. The myth of amateurism shields college sport from tax collectors and members of Congress, seeking unrelated business income taxes, and allows the NCAA to cap athletic subsidies at room, board, tuition and fees. The NCAA will probably play the “amateurism card” to fight a class action lawsuit filed this summer over its use of former athletes’ likenesses to sell licensed products.
So what can the NCAA do to end the pretense that big-time college athletes are amateurs, short of abandoning athletic scholarships or openly turning pro? The first step is to take Brand’s “off the cuff” suggestion seriously and drop the term amateur when referring to scholarship athletes.
The next step would be to adopt a model that continues the practice of awarding athletic scholarships to the nation’s most talented athletes, but eliminates conditions generally associated with employment. Borrowing a term from Myles Brand, I would call this the “collegiate model.”
Under current NCAA rules, athletes who fail to meet athletic expectations can lose their athletic scholarships, i.e., be “fired” at the end of the year, thus transforming athletic scholarships into contracts for hire. And because athletes are subject to their coaches’ control in return for payment of room, board, tuition and fees, they arguably meet common law definitions of employees. The collegiate model, on the other hand, would make satisfactory progress in the classroom the condition for renewing athletic scholarships. "
"I agree with Brand that the term amateur is not a good fit for modern college sports, but it has definitely not outlived it usefulness for the NCAA. The myth of amateurism shields college sport from tax collectors and members of Congress, seeking unrelated business income taxes, and allows the NCAA to cap athletic subsidies at room, board, tuition and fees. The NCAA will probably play the “amateurism card” to fight a class action lawsuit filed this summer over its use of former athletes’ likenesses to sell licensed products.
So what can the NCAA do to end the pretense that big-time college athletes are amateurs, short of abandoning athletic scholarships or openly turning pro? The first step is to take Brand’s “off the cuff” suggestion seriously and drop the term amateur when referring to scholarship athletes.
The next step would be to adopt a model that continues the practice of awarding athletic scholarships to the nation’s most talented athletes, but eliminates conditions generally associated with employment. Borrowing a term from Myles Brand, I would call this the “collegiate model.”
Under current NCAA rules, athletes who fail to meet athletic expectations can lose their athletic scholarships, i.e., be “fired” at the end of the year, thus transforming athletic scholarships into contracts for hire. And because athletes are subject to their coaches’ control in return for payment of room, board, tuition and fees, they arguably meet common law definitions of employees. The collegiate model, on the other hand, would make satisfactory progress in the classroom the condition for renewing athletic scholarships. "
Tuesday, September 22, 2009
Another step in the unraveling of the baskeball market
In a further unraveling of the market for basketball players, Jeremy Tyler, 18, "became the first player to drop out of high school to play basketball professionally outside the United States." Here's an early story: High School Star to Play Professionally in Israel.
The deal with Macabee Haifa has since been finalized, and InsideHoops.com editor says: So instead of being surrounded by little kids on a HS basketball court, Tyler will make 140k and play with adults he can actually learn from. And then instead of being a college freshman a year later, he’ll probably do the same, perhaps for a bit more money. So he’ll have earned a quarter million dollars or so in two years before most players earn a penny (aside from the under the table stuff that just about every good young player gets). The thing is, I don’t think an overseas team is going to go out of their way to train him more than they would any other player, considering he’s only committed to be there for one year. Still, he should at least get way more out of being there for a year than he would as a HS senior."
And, it's not just basketball: here's a story from the Cleveland Plain Dealer on both Tyler and baseball star Bryce Harper: Teens turning pro? Their choice
"Baseball player Bryce Harper of Las Vegas and basketball player Jeremy Tyler of San Diego have found ways to manipulate their sports' entry-level restrictions and turn pro early, much the same way Bernie Kosar did in 1985 when he graduated two years early from Miami and entered a supplemental draft so the Browns could take him. "
The deal with Macabee Haifa has since been finalized, and InsideHoops.com editor says: So instead of being surrounded by little kids on a HS basketball court, Tyler will make 140k and play with adults he can actually learn from. And then instead of being a college freshman a year later, he’ll probably do the same, perhaps for a bit more money. So he’ll have earned a quarter million dollars or so in two years before most players earn a penny (aside from the under the table stuff that just about every good young player gets). The thing is, I don’t think an overseas team is going to go out of their way to train him more than they would any other player, considering he’s only committed to be there for one year. Still, he should at least get way more out of being there for a year than he would as a HS senior."
And, it's not just basketball: here's a story from the Cleveland Plain Dealer on both Tyler and baseball star Bryce Harper: Teens turning pro? Their choice
"Baseball player Bryce Harper of Las Vegas and basketball player Jeremy Tyler of San Diego have found ways to manipulate their sports' entry-level restrictions and turn pro early, much the same way Bernie Kosar did in 1985 when he graduated two years early from Miami and entered a supplemental draft so the Browns could take him. "
Monday, September 21, 2009
Unraveling in junior tennis:
Not only do the most competitive tennis players have to start training while young, they have to train more intensely than is compatible with attending school: The Career Path to Pro Tennis Often Passes High School By
"American junior tennis has had a major change in the last five years. Aspiring pros now commonly abandon regular school for home or online educational programs. Although alternative schooling is not new to junior athletics, tennis is perhaps the only sport whose full participation requires it because of year-round competition and travel. "
Apparently the issue is that tennis players are ranked in part by the number of tournaments they do well in, so they have to play in lots of tournaments.
"American junior tennis has had a major change in the last five years. Aspiring pros now commonly abandon regular school for home or online educational programs. Although alternative schooling is not new to junior athletics, tennis is perhaps the only sport whose full participation requires it because of year-round competition and travel. "
Apparently the issue is that tennis players are ranked in part by the number of tournaments they do well in, so they have to play in lots of tournaments.
Tuesday, September 1, 2009
Market for short basketball players
In China, "The Dream Basketball League was set up to allow players of "shorter" stature to compete on a level playing field, with a height limit of 6ft 2in (1.88m) imposed." But it's hard to enforce the rules (since players can hunker down when measured): "Too tall" player sparks fan violence
HT: Luke Coffman (who you could hire this year, if he's not too tall).
HT: Luke Coffman (who you could hire this year, if he's not too tall).
Wednesday, June 24, 2009
Unraveling and uncertainty: The NBA draft
Last year, the NY Times published a story about high school basketball player Brandon Jennings, who went to play pro ball in Italy rather than going to the University of Arizona: At 19, Plotting New Path to N.B.A., via Europe. About the risks involved they wrote then:
"Instead he chose to play in Italy, where he will earn $1.2 million this season in salary and endorsements, including a shoe contract with Under Armour. Roma signed Jennings to a three-year deal but has little at risk because his contract must be bought out if he leaves for the National Basketball Association.
If Jennings has a strong season with Roma and is among the top 10 selected in next June’s N.B.A. draft, as expected, more players may follow his route. "
As the June 25 draft approaches, here's another story about Jennings, for whom not everything has worked out as hoped: After a Year in Europe, Brandon Jennings Wants to Be Drafted by the Knicks.
"Now, he has his eye on the Knicks.
“I really want to come here, I’m not going to lie,” Jennings said Monday after working out for the Knicks and expressing his appreciation for Coach Mike D’Antoni’s run-and-gun offense. ...The Knicks have the eighth selection in next week’s draft but seem unlikely to pick Jennings if Davidson’s Stephen Curry is available. ...Ricky Rubio, an 18-year-old from Spain whom Jennings called “all hype” last week, is more likely to be the first point guard chosen."
...
"The biggest strikes against the 6-foot-2, 169-pound Jennings are his underwhelming numbers for his Italian club team, Lottomatica Virtus Roma. He averaged 5.5 points, 1.6 rebounds and 2.3 assists in 17 minutes. But he is hoping N.B.A. general managers will see a player with more experience than nearly everyone else in the pool.
“I had to go out there and earn my spot,” he said of his experience in Italy. “It was a job. And I was playing against bigger and stronger guys every day.”
Jennings spoke maturely about his time in Europe, highlighting the character-building value of testing his mettle abroad. But he conceded that at times, it was frustrating. As a freshman at Arizona, the college he committed to before changing plans, he could have been at the center of a successful team that made a run in the N.C.A.A. tournament.
In Italy, Jennings spent most of his time on the bench, trying to make sense of his coaches’ decisions to use him primarily as a defensive player. He said he worried about his draft stock and remembered the critics who told him to go to college.
“It was a humbling experience for me,” Jennings said. “If I would have went to college, I would have played 30 minutes and I would have got whatever I wanted, but I had to go earn my spot.” "
Despite the risk, if Jennings does well in the draft tomorrow, others are likely to follow him to Europe, and soon.
Because of One-and-Done Rule, Others May Follow Jennings's Path:
Talented Recruit Chose European Payday Instead of Mandated College Season
"One year after Jennings's decision to play in Italy, there are signs that his success in the draft could trigger a small but significant movement. Jeremy Tyler, a talented forward from San Diego, already has decided to skip his senior year of high school to play overseas, and several others are now also considering following Jennings's unconventional route to the NBA.
Sonny Vaccaro, the former shoe company executive who helped orchestrate Jennings's move, said he has had in-depth discussions with the parents of seven elite players still in high school about playing overseas instead of going to college.
...
"Because players need to be 19 years old and a year out of high school before entering the NBA draft, they have had few options other than to attend college for at least a year. They view Jennings as a trailblazer because he chose a creative -- if not risky -- route, signing a professional contract instead of adhering to NCAA rules that forbid compensation. "
Update 6/25/09: Jennings chosen 10th, by Milwaukee Bucks. (But the uncertainty lasted right until he was chosen:
"Brandon Jennings' first decision was to not attend the NBA draft. When he was taken 10th by the Milwaukee Bucks, he suddenly showed up.
About a half hour before the draft got under way on Thursday night, Jennings' agent released a statement that his client, who decided to play in Europe last season rather than attend college, would be with his family rather than at the draft with many of the other future NBA players.
There had been media speculation that the 6-foot-1 Jennings, who averaged 5.5 points and 2.3 assists for Lottomatica Virtus Roma of the Italian League, would fall out of the lottery.
"Because we do not have strong grasp of Brandon's draft position, I've advised that he and his family enjoy this day in a more private setting with the people he loves the most,'' Bill Duffy, president and CEO of BDA Sports Management, said in the statement."
"Instead he chose to play in Italy, where he will earn $1.2 million this season in salary and endorsements, including a shoe contract with Under Armour. Roma signed Jennings to a three-year deal but has little at risk because his contract must be bought out if he leaves for the National Basketball Association.
If Jennings has a strong season with Roma and is among the top 10 selected in next June’s N.B.A. draft, as expected, more players may follow his route. "
As the June 25 draft approaches, here's another story about Jennings, for whom not everything has worked out as hoped: After a Year in Europe, Brandon Jennings Wants to Be Drafted by the Knicks.
"Now, he has his eye on the Knicks.
“I really want to come here, I’m not going to lie,” Jennings said Monday after working out for the Knicks and expressing his appreciation for Coach Mike D’Antoni’s run-and-gun offense. ...The Knicks have the eighth selection in next week’s draft but seem unlikely to pick Jennings if Davidson’s Stephen Curry is available. ...Ricky Rubio, an 18-year-old from Spain whom Jennings called “all hype” last week, is more likely to be the first point guard chosen."
...
"The biggest strikes against the 6-foot-2, 169-pound Jennings are his underwhelming numbers for his Italian club team, Lottomatica Virtus Roma. He averaged 5.5 points, 1.6 rebounds and 2.3 assists in 17 minutes. But he is hoping N.B.A. general managers will see a player with more experience than nearly everyone else in the pool.
“I had to go out there and earn my spot,” he said of his experience in Italy. “It was a job. And I was playing against bigger and stronger guys every day.”
Jennings spoke maturely about his time in Europe, highlighting the character-building value of testing his mettle abroad. But he conceded that at times, it was frustrating. As a freshman at Arizona, the college he committed to before changing plans, he could have been at the center of a successful team that made a run in the N.C.A.A. tournament.
In Italy, Jennings spent most of his time on the bench, trying to make sense of his coaches’ decisions to use him primarily as a defensive player. He said he worried about his draft stock and remembered the critics who told him to go to college.
“It was a humbling experience for me,” Jennings said. “If I would have went to college, I would have played 30 minutes and I would have got whatever I wanted, but I had to go earn my spot.” "
Despite the risk, if Jennings does well in the draft tomorrow, others are likely to follow him to Europe, and soon.
Because of One-and-Done Rule, Others May Follow Jennings's Path:
Talented Recruit Chose European Payday Instead of Mandated College Season
"One year after Jennings's decision to play in Italy, there are signs that his success in the draft could trigger a small but significant movement. Jeremy Tyler, a talented forward from San Diego, already has decided to skip his senior year of high school to play overseas, and several others are now also considering following Jennings's unconventional route to the NBA.
Sonny Vaccaro, the former shoe company executive who helped orchestrate Jennings's move, said he has had in-depth discussions with the parents of seven elite players still in high school about playing overseas instead of going to college.
...
"Because players need to be 19 years old and a year out of high school before entering the NBA draft, they have had few options other than to attend college for at least a year. They view Jennings as a trailblazer because he chose a creative -- if not risky -- route, signing a professional contract instead of adhering to NCAA rules that forbid compensation. "
Update 6/25/09: Jennings chosen 10th, by Milwaukee Bucks. (But the uncertainty lasted right until he was chosen:
"Brandon Jennings' first decision was to not attend the NBA draft. When he was taken 10th by the Milwaukee Bucks, he suddenly showed up.
About a half hour before the draft got under way on Thursday night, Jennings' agent released a statement that his client, who decided to play in Europe last season rather than attend college, would be with his family rather than at the draft with many of the other future NBA players.
There had been media speculation that the 6-foot-1 Jennings, who averaged 5.5 points and 2.3 assists for Lottomatica Virtus Roma of the Italian League, would fall out of the lottery.
"Because we do not have strong grasp of Brandon's draft position, I've advised that he and his family enjoy this day in a more private setting with the people he loves the most,'' Bill Duffy, president and CEO of BDA Sports Management, said in the statement."
Friday, May 15, 2009
Non-simultaneous trades in basketball
One of the pleasures of market design--a pleasure it shares with good gossip--is being able to explore in detail the rules by which other people live. The NBA Salary Cap FAQ is full of such details.
It turns out that some details involved in managing an NBA team have something in common with the non simultaneous kidney exchange chains I recently blogged about. This is because NBA teams can exchange players, but the Salary Cap imposes some constraints:
What are the rules regarding trades?
"Teams under the salary cap may make trades as they please, as long as they don't end up more than $100,000 above the salary cap following a trade. But if a team is over the cap, or they are under the cap and a trade would take them more than $100,000 over the cap, then an exception is required. An exception is the mechanism that allows a team to make trades or sign free agents and be over the salary cap. Since teams are usually over the salary cap, trades are usually accomplished using exceptions."
What is the Traded Player exception?
"The Traded Player exception is the primary means used by teams over the cap for completing trades. It allows teams to make trades that leave them over the cap, but it places several restrictions on those trades. Trades using the Traded Player exception are classified into two categories: simultaneous and non-simultaneous. As its name suggests, a simultaneous trade takes place all at once. Teams can acquire up to 125% plus $100,000 of the salaries they are trading in a simultaneous trade. For example, a team trading a $5 million player in a simultaneous trade can receive one or more players whose salary is no more than 125% of $5 million, plus $100,000, or $6.35 million in return.
A non-simultaneous trade may take up to a year to complete. "
What is a non-simultaneous trade?
"A trade in which more than one player is traded away can only be simultaneous; non-simultaneous trades are allowed only when a single player is traded away (although teams can sometimes find ways to configure multi-player trades as multiple single-player trades which are non-simultaneous).
Here is an example of a non-simultaneous trade: a team trades away a $2 million player for a $1 million player. Sometime in the next year, they trade a draft pick (with zero trade value itself) for a $1.1 million player to complete the earlier trade. They ended up acquiring $2.1 million in salary for their $2 million player -- they just didn't do it all at once, or even necessarily with the same trading partner.
In the above example, after the initial trade of the $2 million player for the $1 million player, it was like the team had a "credit" for one year, with which they could acquire up to $1.1 million in salaries without having to send out salaries to match. ....
"Here is a more complicated example of a legal non-simultaneous trade: a team has a $4 million Traded Player exception from an earlier trade, and a $10 million player it currently wants to trade. Another team has three players making $4 million, $5 million and $7 million, and the teams want to do a three-for-one trade with these players. This is legal -- the $5 million and $7 million players together make less than the 125% plus $100,000 allowed for the $10 million player ($12,600,000), and the $4 million player exactly fits within the $4 million Traded Player exception. So the $4 million player actually completes the previous trade, leaving the two teams trading a $10 million player for a $5 million and a $7 million player. From the other team's perspective it's all just one big simultaneous trade: their $4 million, $5 million and $7 million players for the $10 million player. "
HT Steve Leider (who we're trading, non-simultaneously, to Michigan next year)
It turns out that some details involved in managing an NBA team have something in common with the non simultaneous kidney exchange chains I recently blogged about. This is because NBA teams can exchange players, but the Salary Cap imposes some constraints:
What are the rules regarding trades?
"Teams under the salary cap may make trades as they please, as long as they don't end up more than $100,000 above the salary cap following a trade. But if a team is over the cap, or they are under the cap and a trade would take them more than $100,000 over the cap, then an exception is required. An exception is the mechanism that allows a team to make trades or sign free agents and be over the salary cap. Since teams are usually over the salary cap, trades are usually accomplished using exceptions."
What is the Traded Player exception?
"The Traded Player exception is the primary means used by teams over the cap for completing trades. It allows teams to make trades that leave them over the cap, but it places several restrictions on those trades. Trades using the Traded Player exception are classified into two categories: simultaneous and non-simultaneous. As its name suggests, a simultaneous trade takes place all at once. Teams can acquire up to 125% plus $100,000 of the salaries they are trading in a simultaneous trade. For example, a team trading a $5 million player in a simultaneous trade can receive one or more players whose salary is no more than 125% of $5 million, plus $100,000, or $6.35 million in return.
A non-simultaneous trade may take up to a year to complete. "
What is a non-simultaneous trade?
"A trade in which more than one player is traded away can only be simultaneous; non-simultaneous trades are allowed only when a single player is traded away (although teams can sometimes find ways to configure multi-player trades as multiple single-player trades which are non-simultaneous).
Here is an example of a non-simultaneous trade: a team trades away a $2 million player for a $1 million player. Sometime in the next year, they trade a draft pick (with zero trade value itself) for a $1.1 million player to complete the earlier trade. They ended up acquiring $2.1 million in salary for their $2 million player -- they just didn't do it all at once, or even necessarily with the same trading partner.
In the above example, after the initial trade of the $2 million player for the $1 million player, it was like the team had a "credit" for one year, with which they could acquire up to $1.1 million in salaries without having to send out salaries to match. ....
"Here is a more complicated example of a legal non-simultaneous trade: a team has a $4 million Traded Player exception from an earlier trade, and a $10 million player it currently wants to trade. Another team has three players making $4 million, $5 million and $7 million, and the teams want to do a three-for-one trade with these players. This is legal -- the $5 million and $7 million players together make less than the 125% plus $100,000 allowed for the $10 million player ($12,600,000), and the $4 million player exactly fits within the $4 million Traded Player exception. So the $4 million player actually completes the previous trade, leaving the two teams trading a $10 million player for a $5 million and a $7 million player. From the other team's perspective it's all just one big simultaneous trade: their $4 million, $5 million and $7 million players for the $10 million player. "
HT Steve Leider (who we're trading, non-simultaneously, to Michigan next year)
Saturday, May 2, 2009
Football bowls: market design by Congress?
Sports fans will no doubt be relieved to learn that the Feds are on the case: Congress examining fairness, financing of BCS system .
"Tackling an issue sure to rouse sports fans, lawmakers pressed college football officials Friday on switching the Bowl Championship Series to a playoff, with one Texas Republican calling the current system as unworkable as communism and joking it should be labeled "BS," not "BCS."
John Swofford, the coordinator of the BCS, rejected the idea of switching to a playoff, arguing it would threaten the existence of celebrated bowl games. Sponsorships and TV revenue that now go to bowl games would instead be spent on playoff games, "meaning that it will be very difficult for any bowl, including the current BCS bowls, which are among the oldest and most established in the game's history, to survive," Swofford said.
Rep. Joe Barton of Texas, who has introduced legislation that would prevent the NCAA from labeling a game a national championship unless it's the outcome of a playoff system, said that efforts to tinker with the BCS were bound to fail.
"It's like communism," he said at the House Energy and Commerce Committee's commerce, trade and consumer protection subcommittee hearing. "You can't fix it." "
While the BCS system is already a kind of camel (i.e. a horse designed by a committee), it is a considerable improvement over the unraveled market that came before it, in which bowl matchups were frequently mis-matches arranged several weeks before the end of the regular season, see
Frechette, Guillaume, Alvin E. Roth, and M. Utku Unver, "Unraveling Yields Inefficient Matchings: Evidence from Post-Season College Football Bowls," Rand Journal of Economics, 38, 4, Winter 2007, 967-982, with an online appendix).
I'm skeptical that Congress will push this very far, but it is good to know that the country is in such good shape that some of our Congress persons can devote their efforts to this.
HT: Utku Unver
"Tackling an issue sure to rouse sports fans, lawmakers pressed college football officials Friday on switching the Bowl Championship Series to a playoff, with one Texas Republican calling the current system as unworkable as communism and joking it should be labeled "BS," not "BCS."
John Swofford, the coordinator of the BCS, rejected the idea of switching to a playoff, arguing it would threaten the existence of celebrated bowl games. Sponsorships and TV revenue that now go to bowl games would instead be spent on playoff games, "meaning that it will be very difficult for any bowl, including the current BCS bowls, which are among the oldest and most established in the game's history, to survive," Swofford said.
Rep. Joe Barton of Texas, who has introduced legislation that would prevent the NCAA from labeling a game a national championship unless it's the outcome of a playoff system, said that efforts to tinker with the BCS were bound to fail.
"It's like communism," he said at the House Energy and Commerce Committee's commerce, trade and consumer protection subcommittee hearing. "You can't fix it." "
While the BCS system is already a kind of camel (i.e. a horse designed by a committee), it is a considerable improvement over the unraveled market that came before it, in which bowl matchups were frequently mis-matches arranged several weeks before the end of the regular season, see
Frechette, Guillaume, Alvin E. Roth, and M. Utku Unver, "Unraveling Yields Inefficient Matchings: Evidence from Post-Season College Football Bowls," Rand Journal of Economics, 38, 4, Winter 2007, 967-982, with an online appendix).
I'm skeptical that Congress will push this very far, but it is good to know that the country is in such good shape that some of our Congress persons can devote their efforts to this.
HT: Utku Unver
Wednesday, April 22, 2009
Market for authenticity: sports memorabilia
Sports memorabilia from specific games can be valuable, but used to be hard to authenticate. No more. Now Major League Baseball Fights Fakery With an Army of Authenticators, on the spot to tag items as they become sports history.
"Nothing is too mundane to be authenticated, if deemed potentially valuable. Cans of insect repellent used to combat the midges that swarmed the 2007 playoffs in Cleveland were authenticated. So were urinals pulled from the old Busch Stadium in St. Louis and office equipment from since-razed Veterans Stadium in Philadelphia. The Phillies are cutting the clubhouse carpet from last season into authenticated 18-by-24-inch mats. "
Indeed, "...every game has at least one authenticator, watching from a dugout or near one. The authenticators are part of a team of 120 active and retired law-enforcement officials sharing the duties for the 30 franchises. Several worked the home openers for the Yankees and the Mets, helping track firsts at the new stadiums. They verified balls, bases, jerseys, the pitchers’ rosin bag, even the pitching rubber and the home plate that were removed after the first game at Yankee Stadium. "
"With Yankee Stadium emptied after the opening 10-2 loss to Cleveland, Lubrano watched groundskeepers shovel dirt from the mound and home plate into five-gallon buckets. Lubrano sealed the lids with tape, then stuck holograms on each bucket, lid and seal. The dirt will be divided into small containers at a warehouse, in front of an authenticator."
How's that for product differentiation?
Update: Tyler Cowen at MR has a post on a related subject, titled Department of Unintended Consequences. Apparently, fraudulent items in the (unauthenticated) market for antiquities on eBay have driven out genuine items, driving down prices (for genuine as well as fake items, since there's no authentication) with the unintended but welcome consequence that grave robbing has become less profitable.
"Nothing is too mundane to be authenticated, if deemed potentially valuable. Cans of insect repellent used to combat the midges that swarmed the 2007 playoffs in Cleveland were authenticated. So were urinals pulled from the old Busch Stadium in St. Louis and office equipment from since-razed Veterans Stadium in Philadelphia. The Phillies are cutting the clubhouse carpet from last season into authenticated 18-by-24-inch mats. "
Indeed, "...every game has at least one authenticator, watching from a dugout or near one. The authenticators are part of a team of 120 active and retired law-enforcement officials sharing the duties for the 30 franchises. Several worked the home openers for the Yankees and the Mets, helping track firsts at the new stadiums. They verified balls, bases, jerseys, the pitchers’ rosin bag, even the pitching rubber and the home plate that were removed after the first game at Yankee Stadium. "
"With Yankee Stadium emptied after the opening 10-2 loss to Cleveland, Lubrano watched groundskeepers shovel dirt from the mound and home plate into five-gallon buckets. Lubrano sealed the lids with tape, then stuck holograms on each bucket, lid and seal. The dirt will be divided into small containers at a warehouse, in front of an authenticator."
How's that for product differentiation?
Update: Tyler Cowen at MR has a post on a related subject, titled Department of Unintended Consequences. Apparently, fraudulent items in the (unauthenticated) market for antiquities on eBay have driven out genuine items, driving down prices (for genuine as well as fake items, since there's no authentication) with the unintended but welcome consequence that grave robbing has become less profitable.
Tuesday, April 14, 2009
Forward contracts on sporting events
How should tickets for big sporting events be sold, in advance of information about which teams will play in them? American baseball's World Series, the NCAA's basketball Final Four, and other such events are elimination tournaments. So it is known well in advance that there will be some important games, but which teams will play (and hence which fans will most want to attend) is known only quite near the event.
This makes the market less thick than it might be far in advance, and requires fast market clearing once the relevant information becomes known. In turn, this opens the market to third party brokers, and scalping.
The interesting thing is that reading between the lines of the paper, it seems that selling options is actually the second-best solution to these problems. The best solution would be to replace some (but not all) of the tickets with team-specific forwards, which expire worthless if that team doesn’t make the finals. That would allow the “team-oriented” fans to buy forwards rather than tickets which they might not want if their team fails to make it to the finals; it would allow “game-oriented” fans to buy tickets to the finals just like they can right now; it would mean that many more tickets could be sold in total (for the final match-up, you can sell 32 times as many forwards as there are seats), which would reduce the supply/demand imbalance which often drives scalping.
Professor Sainam, however, reckons that the forwards idea is a non-starter, for reasons of optics: she worries, she tells me, “that fans could perceive the league as profiting unduly from the situation”. And so the options option is the next best thing. "
HT: Steve Leider (on his way to Michigan).
This makes the market less thick than it might be far in advance, and requires fast market clearing once the relevant information becomes known. In turn, this opens the market to third party brokers, and scalping.
Contingent contracts might be a solution (e.g. a market in which I can buy a ticket to the World Series contingent on the Boston Red Sox being in the game).
Felix Salmon blogs about a paper exploring a related idea (because of a fear that contingent contracts might be regarded as repugnant): Selling forwards for sporting events.
"Preethika Sainam of Indiana University, along with two colleagues from Chapel Hill, has an interesting paper suggesting that sports organizations shouldn’t sell tickets to big sporting events, like the finals of the Final Four, where the teams who will be playing are unknown. Instead, they say, they should sell options to buy tickets at a certain price once it’s known who’s going to be playing. This system, they say, will raise more money in ticket sales, will make fans happier, and will reduce scalping.The interesting thing is that reading between the lines of the paper, it seems that selling options is actually the second-best solution to these problems. The best solution would be to replace some (but not all) of the tickets with team-specific forwards, which expire worthless if that team doesn’t make the finals. That would allow the “team-oriented” fans to buy forwards rather than tickets which they might not want if their team fails to make it to the finals; it would allow “game-oriented” fans to buy tickets to the finals just like they can right now; it would mean that many more tickets could be sold in total (for the final match-up, you can sell 32 times as many forwards as there are seats), which would reduce the supply/demand imbalance which often drives scalping.
Professor Sainam, however, reckons that the forwards idea is a non-starter, for reasons of optics: she worries, she tells me, “that fans could perceive the league as profiting unduly from the situation”. And so the options option is the next best thing. "
HT: Steve Leider (on his way to Michigan).
Thursday, March 26, 2009
Update on scalping
My old friend the sports economist Larry DeBrock writes to update my recent post on Scalping and intermediation:
"...the Cubs won a big lawsuit in 2003 after they set up a wholly separate firm “Premium Ticket Services” and transferred GREAT seats to them before opening tickets to the general public. They made some tremendous markups (reported to be 30 times face) on these seats.
Attached is the law review paper about this case.
Jasmin Yang, A Whole Different Ballgame: Ticket Scalping Legislation and Behavioral Economics?, 7 VAND. J. ENT. L. & PRAC. 111, 111 (2004)."
I can't resist adding that, long, long before Larry became Dean of the College of Business at the University of Illinois in Urbana Champaign (so long ago that it was still called the College of Commerce, and the Rand Journal was still the Bell Journal), he coauthored what I always hoped would become the definitive paper on strikes in major league baseball.
"...the Cubs won a big lawsuit in 2003 after they set up a wholly separate firm “Premium Ticket Services” and transferred GREAT seats to them before opening tickets to the general public. They made some tremendous markups (reported to be 30 times face) on these seats.
Attached is the law review paper about this case.
Jasmin Yang, A Whole Different Ballgame: Ticket Scalping Legislation and Behavioral Economics?, 7 VAND. J. ENT. L. & PRAC. 111, 111 (2004)."
I can't resist adding that, long, long before Larry became Dean of the College of Business at the University of Illinois in Urbana Champaign (so long ago that it was still called the College of Commerce, and the Rand Journal was still the Bell Journal), he coauthored what I always hoped would become the definitive paper on strikes in major league baseball.
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