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The Law and Economics of the Doping Scandals

Dave Hoffman

Dave Hoffman is the Murray Shusterman Professor of Transactional and Business Law at Temple Law School. He specializes in law and psychology, contracts, and quantitative analysis of civil procedure. He currently teaches contracts, civil procedure, corporations, and law and economics.

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4 Responses

  1. Kristian says:

    “The social benefits from steroids are: increased abilities by using players, resulting in dramatic increases in personal popularity and earning potential; increased revenue and happiness in cities with teams that have doped by where the doping is not exposed; more physical activity occasioned by individuals trying to ape players’ success.”

    I would hesitate to call those benefits ‘social’. Arguably, sports is a zero-sum game: the one athlete’s (supperter’s) gain is the other’s loss.

  2. Randy Picker says:

    Yes, I make a version of the zero-sum argument in a blog post (and Chicago Tribune op-ed) yesterday: see http://uchicagolaw.typepad.com/faculty/2007/08/what-are-the-li.html

  3. TJ says:

    Dave, you are leaving out a critical social cost of doping — fan disutility incurred by too high a standard of play. You seem to assume that fans will automatically be happier if all players are doped–if we did no monitoring of any limits. That is not true. Fans are happier when their team is relatively more successful–cheats and get away with it, but if everybody is doping, the overall level of utility is likely to go down. There is an optimal level of average ability and optimal level of variance–we would not want to watch a bunch of equally skilled cyborgs compete. Presumably the NFL and MLB would like to enforce this.

    The economic problem with doping therefore is that it alters the ideal baseline that the central organization would like to implement. If MLB concludes that fans as a group would like gatoraded players but not doped players, doping frustrates MLB’s ability to implement its policy.

    You then raise the possibility that we can have segregated leagues. The “dope” league and the “clean” league. This would allow competition to determine the optimal level of performance that fans actually desire. But the “clean” league needs enforcement. In a world of segregated leagues, the best strategy that may be attempted would be to be a secret-doper in the “clean” league where the player has a relative advantage compared to everyone else.

  4. greglas says:

    Does the manufactured illusion of progress constitute utility? (I admit to being somewhat willfully baffled by how econo-thinking applies to games and entertainment.)

    Doping athletes is undoubtedly bad for the health of athletes in the aggregate. Those who lose to cheaters undoubtedly feel cheated. But if doping were sanctioned under the rules, with athletes constantly breaking records for strength and speed, the public might “benefit” insofar as record-breaking of that sort leads to increased public interest and ticket sales. (Someone commented to this effect on Randy’s blog.)

    To an econo-thinker, I guess the thing to do is ask whether the health losses to athletes (and even more would-be athletes) are outweighed by the social benefits expressed via the increased ticket sales.

    While I really don’t think that way at all personally, it isn’t clear to me that the public finds “doped” record-breaking to be a form of economic disutility — or at least I’m not convinced that they’d be able to make that perception of disutility expressed through consumer preferences.

    … Personally, I’m rather disenchanted with the industry of spectator sports. I’d rather encourage amateurs to get away from fixating on the sports professionals on their television and to get out into their local parks competing themselves. But that’s just me.