Why the World Cup Is an Economist’s Dream (Ep. 6)
World Cup Edition: Steve Levitt on why the center cannot hold in penalty kicks, why a running track hurts home-field advantage, and why the World Cup is an economist’s dream.
This is a short, sweet, and simple episode — a conversation with Steve Levitt (hey, you could do worse) about World Cup 2010, which begins tomorrow in South Africa and in the coming weeks will consume tens of billions of hours of global mindshare. The latest odds leaders: Spain (4-1), Brazil (9-2), Argentina (13-2), England (9-1), and Germany (12-1). The U.S. is listed (generously?) at 80-1; remember, despite the conventional wisdom, bookies do not necessarily seek to “balance” their books and live off the vig, but rather take advantage of bettor sentiment. (Here’s an article we wrote on the topic; here’s a related research paper of Levitt’s.)
The podcast covers two topics in particular: home-field advantage and penalty kicks.
The home-field advantage stuff is based on clever research by Thomas J. Dohmen (“In Support of the Supporters? Do Social Forces Shape Decisions of the Impartial?”; press summary here).
The penalty-kick findings are based on research by Levitt, Pierre-André Chiappori, and Tim Groseclose; their paper’s very sexy title is “Testing Mixed-Strategy Equilibria When Players Are Heterogeneous: The Case of Penalty Kicks in Soccer.” I will not give away its most surprising finding here, but I will give a hint, courtesy of Yeats: the center cannot hold.
If you are the kind of person who can’t get enough empirical analysis about soccer, you should definitely read Soccernomics, by Simon Kuper and Stefan Szymanski, parts of which I found to be very good.
I was in Madrid last month and saw Real Madrid beat Athletic Bilbao in a game that was very important when it began but became less so since Barcelona was beating Sevilla at the same hour, essentially clinching La Liga title. Even so, seeing Kaka, Cristiano Ronaldo, and Iker Casillas in person, surrounded by thousands of Spanish fans who watch the match as carefully and reverently as if it were the national theater, has made me more excited about this World Cup than any in the past. I cannot wait for tomorrow morning.