The economics of drugs in sport

Abstract

This essay explains the approach that economists take when explaining the phenomenon of drug-taking in sport. The economic method models such drug-taking as a rational activity in which athletes respond to the existing incentives. The ‘solution’ to the drugs in sport problem is to alter the incentives under which athletes operate. The essay notes that there are two means for implementing such alterations. The first is via regulation, and the second is via the operation of market forces within the market for different sports. The latter modality is naturally suggested as the preferred one by the economic method. However, as the essay reports, the full analysis of this issue has not been completed, so the essay is agnostic on the matter of the optimal manner for changing the incentives under which athletes operate.

Notes

¹ Kahneman and Tversky, ‘Prospect Theory: An Analysis of Decision under Risk’.

² Houlihan, Dying to Win. The following is a good sample of the literature: Berentsen, ‘The Economics of Doping’; Bird and Wagner, ‘Sport as a Common Property Resource’; Haugen, ‘The Performance-enhancing Drug Game’; Ehrenberg and Bognanno, ‘Do Tournaments have Incentive Effects?’; Kräkel, ‘Doping in Contest-like Situations’; Kräkel and Sliwka, ‘Risk Taking in Asymmetric Tournaments’; Maennig, ‘On the Economics of Doping and Corruption in International Sports’; Preston and Szymanski, ‘Cheating in Contests’; Savulescu, Foddy and Clayton, ‘Why We Should Allow Performance enhancing Drugs in Sport’; and Szymanski, ‘The Economic Design of Sporting Contests’.

³ Milgrom and Roberts, Economics, Organization and Management, 367–9.

⁴ See Berentsen, ‘The Economics of Doping’.

⁵ See Bird and Wagner, ‘Sport as a Common Property Resource’.

⁶ Niskanen, Bureaucracy and Representative Government.

⁷ Brissonneau, ‘Deviant Careers: The Case of Cycling’.

⁸ See Kräkel, ‘Doping in Contest-like Situations’.