Thursday, August 02, 2012

Responding to Incentives

Columnist Mark Purdy opines on the Olympics badminton scandal. Excerpts: [bold added]
Doubles teams from South Korea, Indonesia and China tried intensely and doggedly to lose their matches in the round-robin portion of the badminton tournament Tuesday. Why? To put their countries in a more favorable position in the elimination bracket when it began Wednesday...

In one match, both teams were desperately trying to play horribly and lose, so players were lobbing shots underhand to set up easy kill shots for the other team -- only to have the other team try to sabotage the kill shots with wayward returns. Officials issued warnings during the match, to no avail...

All of the expelled teams had clinched spots in the bracket. So they were looking ahead. They were trying to get an edge. Isn't that what athletes do?...

For example, the expelled Chinese team was clearly attempting to manipulate the 16-team bracket so that it would not have to face the other Chinese team until the final instead of the semifinals. This would have made it possible for China to win gold and silver medals rather than gold and bronze. Wouldn't you do that for your teammates? For your country?

Over the years, history shows that if you give teams the chance to benefit from losing, they will lose.
Mark Purdy goes on to mention examples from baseball, where teams are suspected of losing to keep superior teams out of the playoffs, and basketball, where teams attempt to redeem terrible seasons by losing so they can get a higher draft pick.

If you reward behaviors that you don't want, ranging from single parenthood to staying unemployed to not planting corn to hitting shuttlecock serves into the net, then you will get more of those behaviors. That's why the dismal science of economics, which examines how human beings respond to incentives, has more relevance than ever before.

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