Who Is The Best In Sports And Economics

[david_berri]

A few more thoughts on my latest for Forbes:

Few Would Take The Nobel Prize Selection Process Seriously If Applied To Sports

In sports -- as noted in Chapter Six -- we have a number of metrics to answer that question. But this class isn't just about sports. It's also about economics.

When people ask the question "who is the best?" in economics, often they turn to Svergiges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (i.e. the Nobel Prize in Economics). Economists who receive this prize are often thought of as "the best". But as detailed in my latest for Forbes, the methodology used to determine this award seems a bit suspect. Specifically, it appears the Nobel Prize is determined by less than ten people primarily from Sweden.

To put that in perspective, imagine if the NFL's Hall of Fame -- located in Canton, Ohio -- was entirely determined by six people from Canton, Ohio. Or members to baseball's Hall of Fame-- located in Cooperstown, New York -- was selected by six people from Cooperstown. One suspects that many people might wonder if each Hall of Fame was really selecting "the best" with this approach.

Perhaps the issues with the Nobel Prize selection played a role in the interesting story told in Chapter Four.  As the book notes, Ronald Coase received a Nobel Prize (in 1991) for the Coase Theorem. But as the book notes, what Coase said was

• originally said about sports by Simon Rottenberg in 1956 (well, sort of -- Rodney Fort stated more clearly what Rottenberg was saying).
• and as Paul Samuelson notes, the Coase Theorem wasn't really said by Coase. It was originally said by George Stigler (who also was given a Nobel Prize in 1982 -- but not for this).

Yes, it is a bit confusing. But one could argue that Coase's Nobel Prize could have gone to Rottenberg. Or maybe Rod Fort!

Regardless, the story of the Nobel Prize in Economics does give us an opportunity to think about how we measure performance. This is a crucial topic in economics (not just sports economics) because by being able to measure performance we can discuss a host of issues including the existence of discrimination (race, gender, nationality, etc...), whether or not workers are exploited, how managers impact performance, and many more.