6. Why the World Cup Is an Economist's Dream

This is for Economics Radio. Here's your host, Steven Dubner. So, Steve Lovett, it is World Cup time, World Cup soccer, every four years. This year in South Africa. What can the World Cup teach us about economics or even about human behavior?

So I think there's a lot to learn from soccer, maybe surprisingly, about economics and human behavior. Now, one of the most interesting studies that's been done looked at the home field advantage. And in soccer, as in almost every sport, there's an enormous home field advantage. And it's puzzling. Why is it across all these different sports that the team at home always does better? Is it have to do with sleeping in your own bed?

The referees, is it knowing the quirks of your own field or your own court? Well, in soccer, there's a little hint as to what the source of the advantage is. And that comes from two different kinds of stadiums. Some soccer fields are built in stadiums that are expressly meant for soccer.

And in those stadiums, the people tend to be very close to the field. There are other soccer stadiums, which are also used for other things, for instance, for track and field events. In that case, there's a big track that circles around the field. During this study, they were able to divide teams into two groups, one of which had a much bigger home field advantage than the other.

the only difference that they could discern between these two groups was something small and insignificant that you never would really associate with Home Field Advantage, but turned out indeed to be quite important. In the one group that had the big Home Field Advantage, they played in stadiums that were built exclusively for soccer. The other set of teams, which had a much smaller Home Field Advantage, they played in stadiums that were multi-use. Not only was it used for soccer, but they would have a track there where they held track in field events. So I would think, well,

Yeah, you can see how there might be a relationship, but how does having a team that plays on a field on a pitch that was built just for soccer in this stadium use for nothing else? How does that translate into being better? Does that make you a better team at home than the others? How could that work?

But what they conjecture is that in the stadiums that have no track, the fans are much closer to the pitch. They're right on top of the players. And more important than the players, the referees, the officials. And what they conjecture is that it is this.

this presence of the fans so close, this intimidating presence of the fans that believes the officials into making decisions that benefit the home team. And they can actually measure this. So one of the easiest ways to measure the effect of the officials is to look at the extra time that is added on because of injuries and delays. And it turns out that in these stadiums where the fans are right on top of the stadium, there's no track in between, that when the home team is behind,

The referees add on a lot of extra minutes when the home team is ahead. They add on very few minutes relative to the stadiums where the track is in between. So it seems that the intimidating presence of the fans has the effect of influencing the number of minutes that the referees add on to the game in order to benefit the home team. So Levitt, what do you know about penalty kicks in soccer matches? Penalty kicks.

in soccer, turn out to be an economist stream. And that's because there is an enormous body of research into something called game theory. Game theory is about the strategic interactions between small numbers of competitors. The beauty of the penalty is that it matches almost perfectly with the theoretical requirements of a two-person simultaneous move game. So the idea is that the soccer ball gets kicked so hard that if the goalie doesn't jump really before he knows where the ball's going, he's got no chance of stopping it.

and the kicker kicks a ball. They move at the same time, and it's a very simple strategy space. The kicker can either kick it to the right, and kick it to the left, or you can kick it in the middle. That's three choices. The goalie just either stands there and doesn't move, or he jumps to the left, or he jumps to the right. So game theory...

When you write down the math, actually makes surprising predictions about how penalty kicks will work. A fact of life is that right footed kicker has an easier time kicking it to the left side of the goal than the right side of the goal because of the curvature of the ball when it kicks it. You might think that being the case that

a right footed kicker would always want to kick it to the left, that's always better kicking it. Well of course the goalie knows that the right footed kicker is better at kicking it left. That means that goalie has a very strong incentive to jump to the kicker's left or the goalie's right to try to block those kicks. Now when you write down the math it turns out surprisingly that in order to make everything work out,

You might have thought that the kicker in the goalie would both say jump to the right the same percentage of the time, but in fact, it's got to be the case. The goalie will jump to the kicker's left more often than the kicker will actually kick it to the kicker's left. That's a strong prediction that comes out of game theory, but it's something that intuitively you would never really expect to see. The striking fact is that

These players play almost perfectly in line with what they predict. So indeed, as we expect, the goalies do jump much more to the kickers left than the kickers actually kick the left. And indeed, every single prediction we make except for one is validated in the data. And the one that doesn't occur in the data is actually extremely interesting.

It turns out that there's one kind of strategy that kickers don't employ nearly as much as they probably should. And that's just to kick the ball right down the center. So in our data, if you're a kicker, the single best way to score is to just kick it right down the middle. Because it turns out the goalie is almost never there. Because in some sense, I think it's too embarrassing for the goalie to stand in the middle and just let you kick it and not even try. I mean, the press will berate the goalie if he doesn't seem to be trying to stop it.

And because the goalie has his strong incentives not to stay in the middle, the kicker should just kick in the middle.

But the problem is, I think that when we write down our theory, we're assuming that the goal of the penalty kick is to score. I think that's wrong. In the end, it's not just a goal score. The goal is also not to look foolish. And indeed, the way you look most foolish in a penalty kick is if you kick it right down the middle and it gets stopped. So in the end, what we conclude is, while Game Theory is very predictive in many dimensions with respect to trying to understand penalty kicks,

By focusing only on whether a goal is scored, we really get it wrong, because there's other private incentives, right? The idea of not being the goat of the century, the guy who's remembered, so Ronaldo kicked one out of the goal right over the center. We'll never be forgiven for having made that mistake in the World Cup. So they're private incentives that players not just want to score, but they don't want to look foolish when they don't score. And consequently, they don't do what's best for the country or for the team,

They shade their strategies just enough so that they're doing the thing that's safe, even though it won't result in as many goals. So if I kick left and the goalie jumps to his right to my left and the goalie stops, it makes a great save, I failed but heroically.

Yeah, so you made a good kick, the goalie made it even better play and people won't be happy, but that won't be what you remembered for. It won't be on your gravestone that you're the guy who kicked it to the left and the goalie stopped it. And if I kick to my right and the goalie goes to his left and saves it the same thing, but if I kick to the center,

And the goalie happens to kind of hang out there and stop it, then I'm seen as a total fool. That's the end of your endorsements for the rest of your career, most likely. All right, so let's say you, let's say you, Steve Levitt are playing for the United States of America in this World Cup, and you've got a penalty kick. And you know this. You know that you're odds of making a kick are much better if you kick straight down the center.

but your odds of being privately, of being considered personally a fool are much higher if you kicked down the center and fail. What do you do? I'm economist. I'm only worried about myself. I kick to the left because that's where it's easiest for me to kick.

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