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I’ve been teaching college economics for a little over two decades now. Years ago I learned that I need to watch very closely my choice of language in the classroom. For example, early in my teaching days I would lace a “hell” and a “damn” or two into my lectures. I can’t say I pondered the reasons very carefully. I suppose I was just trying to be relatable and have an effect. But soon I…
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There is no written rule against a basketball player slapping the court floor. But there are consequences of violating informal rules. Here is a fun example from the Ohio State vs. Nebraska men’s basketball game. http://www.sportingnews.com/ncaa-basketball-news/4695684-jae-sean-tate-floor-slap-video-ohio-state-nebraska-highlights-tai-webster
It was March 7, 1982, and the cold drizzle falling on Greensboro, North Carolina, was no match for college basketball fever. The hottest ticket in the country was the Atlantic Coast Conference (ACC) men’s basketball championship, with nationally ranked number-one North Carolina taking on number-three Virginia, in a rematch of their two-game split of the regular season. This game had it all. Both teams had come in with only two losses all year. A total…
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Over at the Sports Economics blog, Madmen has attracted some interest. John Considine recently pointed to some high profile examples of when a soccer referee changes the outcome of the match because of how much stoppage time is added. In most such instances, there’s a strong perception of unfairness. Arguably no one, including referees but especially teams and fans, wants matches decided arbitrarily. In response, momentum builds for a change in the rules. Considine likens the soccer scenario to the…
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Competitive sport is a microcosm for understanding human affairs. Both in life and in sports, the rules of the game largely shape the incentives that people have for how to play the game. When the rules change (either formally as through legislation, or informally as through common practice) peoples’ incentives also change, and a different outcome will be observed–for better or worse. Chapter 1 of Madmen opens with the story of college basketball being saved by adopting…
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Tonight — at last — Notre Dame and Alabama take the field to decide this year’s college football champion. An estimated 36 million viewers will tune in, and both schools will receive paychecks of $18 million. The winning team promises to have its assistant coaches descended upon with lucrative job offers. Alabama’s Nick Saban is already college football’s highest paid coach, at an annual salary of $5.5 million . And Notre Dame’s head coach, Brian Kelly, is already fending off rumors that…
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Still two weeks remain before the winner of the Heisman Memorial Trophy is announced (explained below). Each year, about 900 members of the media and former Heisman winners cast ballots for their top three picks. Awarded since 1935 to the best player in college football, the Heisman traditionally has gone to upperclassmen, usually running backs or quarterbacks. Only three sophomores have ever won, the first in 2007. And no freshman has ever won, with just…
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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.189, ch.7) The most successful entrepreneurs know what they do well, they know the market and the opportunities within it, and they choose those activities that create the most value. This is true in economic as well as political markets.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.178, ch.7) [W]hen the right elements come together at the right time and place and overwhelm the status quo, it is because special people make it happen. We call them political entrepreneurs.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.176. ch.7) While we started this book with Danny Biasone saving basketball, we end it with Norman Borlaug saving a billion lives. These stories are not that different. Both faced vested interests, which were reinforced by popular beliefs that things should be a certain way—that is, until a better idea came along.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.174, ch.6) Because there was a general belief that homeownership was a good thing, politicians found the public with open arms.... Everybody was winning—except Alfred Marshall, whose supply and demand curves were difficult to see through the haze of excitement at the time, and except Friedrich Hayek, whose competition as a discovery procedure was befuddled... In short, once politicians started getting credit for homeownership rates, the housing market was doomed.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.166, ch.6) Everyone responded rationally to the incentives before them. In short, the rules that guided homeownership changed over time, which in turn changed the incentives of these actors. And bad things happened.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.153, ch.6) They understood the economics. The ideas had already won in ... the regulatory agency itself. All that remained to be overcome were some vested interests and a handful of madmen in authority.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.146, ch.6) If the idea for auctions of spectrum use rights had been part of the public debate since at least 1959, why didn’t the relevant institutions change sooner? What interests stood in the way?
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.121, ch.5) When an academic scribbler comes up with a new idea, it has to resonate well with widely shared beliefs, which in turn must overcome the vested interests at the table. Many forces come together to explain political change, even though it may seem like coincidence of time and place.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.120, ch.5) It’s the rules of the political game that deserve our focus, not politicians’ personalities or party affiliations.
From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.119, ch.5) In short, ideas are a type of higher-order capital in society. Like a society that is poor in capital and therefore produces little consumer value, a society that is poor in ideas and institutions will have bad incentives and therefore few of the desirable outcomes that people want.
