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What can economics learn from cricket – and cricket from economics?

With England’s five-match Test series against India starting this week, as well as the new Hundred competition on prime-time free-to-air TV, cricket continues to offer data to test economic ideas. Economics of incentives and demand provide useful insights for those who run the sport.

Cricket has several features that make the game interesting to economists, providing excellent data to test economic ideas. The game has a long history of meticulously detailed scorecards, dating back to the 18th century – around 700,000 available at the Cricket Archive, covering 1.2 million different players.

There has been a reasonable amount of consistency in the basic rules of the game and long-standing competitions – the English County Championship in England became official in 1890 had been held unofficially since 1709. But there has always been a tendency, even if sometimes reluctantly, to tweak the rules of the sport, and to experiment with new competitions and products, such as the newly introduced Hundred and the Twenty20 format of the multi-billion dollar Indian Premier League, which was invented in England in 2003.

Because of the discrete nature of play in cricket, it is easy to collect definitive data on individual-level performance, productivity and decision making. This wealth of data is perhaps only comparable to baseball, and cricket has also had its `Moneyball moment’, with decision-makers in the game increasingly trusting machine learning algorithmsas much as captain’s instincts. 

There are also sources of measurable ‘external randomness’ at almost every game of cricket, which can last up to five days or even longer, from the coin toss at the beginning that determines who chooses whether to bat first, to the substantial influence of varying weather conditions.

In this article, we briefly discuss two potential contributions of cricket to economics: how to guarantee fair decision-making; and tests of ‘auction theory’ in the field. We then look at two examples where cricket can learn something from economics: the determinants of consumer demand; and how to change undesirable behaviour.

What can cricket tell us about fair decision-making?

Many economists have studied the decisions of referees and judges to determine the factors that drive ‘unconscious bias’ (Dohmen and Sauermann, 2016). In sport, officials tend to favour teams when they are playing at home, perhaps due to the social pressure of the stadium crowd (Bryson et al, 2021). Cricket umpires must make rapid judgements, particularly in relation to important leg before wicket(LBW) decisions. The evidence suggests that away cricket teams, even at the elite international level, receive less favourable LBW decisions than home teams (Ringrose, 2006Sacheti et al, 2015).

Traditionally, in international Test cricket, umpires were normally from the same country as the home team. After a trial (from 1992 and adopted in 1994), at least one of the two on-field umpires was from neither the home nor the away team’s country, making the transition to both on-field umpires being from neutral countries from 2002. 

Researchers have studied these changes to show that social pressure from the home crowd did have an effect on the home bias of umpires (Sacheti et al, 2015). During the Covid-19 pandemic, Test cricket reverted temporarily back to non-neutral umpires, sometimes in empty stadiums. This provided a setting to revisit the determinants of home advantage and biased judgments. Figure 1 below shows that home advantage in Test cricket appears to have disappeared in 2021, despite the return of home umpires.

Figure 1: Home/Away wins ratio in Test cricket 1980-2021

Source: Author's calculation

Compared with other sports, cricket was an early adopter of technology (since around 1992) to aid the decisions of officials. The Decision Review System (DRS), first used in 2008, allows players to refer an on-field decision they disagree with to a third (TV) umpire. The evidence suggests that this has reduced the potential bias of decisions in favour of home teams and generates greater confidence in the accuracy and fairness of decisions (Gregory-Smith et al, 2019).

Putting a limited number of decision reviews in the hands of the on-field players adds an exciting dimension to the sporting contest. This is in stark contrast to how technology is being used to improve the accuracy of decision-making in football, where the Video Assistant Referee technology (VAR) has come under consistent criticism from players, fans and pundits alike.

What can cricket tell us about auctions and superstars?

The economics of ‘superstars’ and their extreme earnings have been of great interest since Sherwin Rosen's seminal paper, which showed how even very small differences in talent can result in huge differences in revenue (and player wages). The IPL offers a unique insight into auctioning talent and the value of elite sports stars. 

The IPL is an annual Twenty20 competition where players are bought by the League’s franchises at an auction. Players enter the auction with a reservation (base) price which they set for themselves according to overall floors and ceilings set by the organisers. Franchises (teams) are given a maximum budget they can spend. This setting generates several interesting questions for economists: 

  • What reservation price should a player set? 
  • Do the auctions efficiently under- or over-value players? 
  • How great is the ‘winner’s curse’? (i.e. to what extent does the winning bidder overpay for a player, only to be disappointed?)

At the time of the IPL auction, the true value of a player is unknown, but it will be known once the player’s performances in the tournament are observed. The price of a player may be determined by good or ‘noisy’ signals of their value (for example, from recent performances or ‘superstar’ following/attraction). 

A further dimension is added by the fact that participants (teams) in the auction are directly competing over indivisible and limited amounts of talent – if the Mumbai Indians ‘win’ Ben Stokes, then Royal Challengers Bangalore cannot have him. This feature of talent markets has only been explored theoretically but not empirically (Burguet and Sákovics, 2019).

What can cricket learn from economics?

Cricket administrators are constantly striving to keep demand high, to sell tickets and to maximise the value of broadcast rights, especially in the UK, where the marketplace for leisure activities and major team sports is highly competitive. 

The determinants of the demand for cricket vary a lot between casual and core supporters (Morley and Thomas, 2007). Traditionally, a cricket match is played over multiple days and the timing (day of the week and time of day) of the match matters. But with competing demands on consumers’ time, administrators have looked to shorter versions of the game, hoping to appeal to a wider and younger audience (casual supporters). In terms of drawing a large (and lucrative) crowd, there is evidence that superstars matter for cricket attendance (Blackham and Chapman, 2004;Bhattachayra and Smyth, 2003Paton and Cooke, 2005). As mentioned above, in recent times there has been a move toward franchise cricket such as the IPL. 

The IPL has been the most successful model, focusing on attracting superstars, Indian and international, as well as giving space for emerging stars to break out. The England and Wales Cricket Board’s (ECB) new Hundredhas attempted to draw on lessons from the IPL. 

But it is uncertain what impact the new competition will have on core cricket support in England and Wales, which has traditionally been based on an affinity with a larger number of more localised teams, which foster local talent and work closely with local communities. If the novelty of the Hundred wears off, then it appears likely that the old and reasonably successful institutions of the sport will suffer greatly from such a failed experiment. Not least, the ECB has spent a large amount of its budget on marketing the Hundred. These funds could have been invested in the local activities of cricket clubs throughout the country, who are dependent on the money that flows down through the ECB and the deals it makes with broadcasters. 

Cricket’s rules have been frequently tweaked, especially in the shorter form, with a view to creating a better spectacle and increasing demand from viewers. For a long time, sports economists have focused on the ‘competitive balance’ in contests or tournaments as a key determinant of demand and fan interest. 

But recent work suggests that it is less about competitive balance and more about the extent or possibility of surprise, suspense and shock that really matters (Buriamo et al, 2019). It remains to be seen whether franchise cricket like the Hundred, with squads of players built from equal budgets in IPL-style auctions, can generate enough of this surprise, suspense and shock to keep fans coming back for more in seasons to come.

Slow over rates – the rate of play within a period, or what determines how much play a spectator gets to see in a day – are a big threat to the appeal of cricket, even among hardened supporters. This has been a growing concern for decades, with player bans and fines proving unsuccessful at reversing the trend.

Economics insights on the use of incentives and mechanism design may help cricket administrators to fix this. Cricket administrators can look to economic theory to address the problem. This theory suggests that the punishments need to be severe and consistently enforceable to change behaviour. 

For example, punishments should be applied in-play and should significantly affect the probability of a team winning (such as penalty runs). The organisers of the Hundred competition have sought to encourage quicker over rates through in-play punishments, though the motivation may be to please the broadcasters which have committed valuable prime-time coverage on the venture.

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Authors: Sarah Jewell and Carl Singleton
Photo by Alessandro Bogliari from Unsplash
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