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WARP and Arkansas State tickets

Abstract:

We report on an experimental test of the Weak Axiom of Revealed Preference (Samuelson, 1938). We recruited approximately 6,000 University of Oregon student freshman, offering a combination of higher education and athletic entertainment in exchange for tuition, fees, and opportunity costs ranging from $0 to $100,000. In an effort to obtain a bound on the hedonic value of the football component of this joint commodity we then offered the freshman free tickets to attend a Duck football game. UO’s educational quality and the non-educational hedonic benefits of college life were held constant. Fewer than 229 freshman subjects accepted this offer. We assume continuity to conclude that 95% of UO’s entering class wouldn’t watch the Ducks humiliate Arkansas State even if you paid them. This work demonstrates that the athletic department was wasting money when they paid AS $950,000 to play UO, and that the value of football – or at least bad football – has been oversold as a UO undergraduate admissions recruiting tool. We conclude that there is no statistically significant evidence of irrational choice behavior on the part of this sample of UO undergraduates.

Will Rubin ODE story here. Recent UO game contracts here. Big paydays for the visiting teams to take these big losses to the Ducks. Well, big paydays for the coaches and AD’s, that is. Tennessee Tech gets $500,000, Arkansas State $950,000. Excerpt:

10 Comments

  1. Anonymous 08/28/2012

    Chip Kelly gets 3% of the gate, gross. You don’t need to be an economics professor to get this one.

  2. Anonymous 08/28/2012

    “We assume continuity…” Do the same thing in an analysis of the Big Ideas and suddenly Bean looks prescient.

    • Not the real Bob Berdahl 08/28/2012

      Given this questionable continuity assumption one has to wonder, as other faculty have, whether this scholarship suffers from the same lack of objectivity and distortion of the facts as does this blog.

  3. Anonymous 08/28/2012

    I will provide a losing team for the Ducks to play at 25% of what Arkansas is getting. The Ducks win, it saves money and creates jobs. Perfect.

  4. Anonymous 08/29/2012

    Lee figured the practice was worth over $1 million to Kelly, but UO knew how much bad press that would get, so they got ESPN to sweeten the deal with another broadcast game for AS. How pathetic.

    • Anonymous 08/29/2012

      I don’t know much about big time college athletics so please clue me in to why this is pathetic. It seems that it Arkansas state would have to spend quite a bit of money to come out here and play while Oregon would make a lot of money from ticket sales. It seems only fair that Arkansas state should share that benefit in some way and what’s described in the document above doesn’t seem out of bounds in that light. Please explain what I’m missing.

    • Anonymous 08/29/2012

      Sports is about fair competition between near equals. Paying people to lose may be good economics, but it’s antithetical to the ethics of athletic competition.

    • Anonymous 08/29/2012

      To throw around words like “pathetic” I thought you’d have more substance to your argument.

      – I don’t see anything wrong with paying teams to visit as they have to incur significant expense and they should share in the ticket sales

      – It’s hard to get high ranked teams to visit as there’s little reward in the current system for playing good teams in the out of conference schedule

      – Sac state was “paid to lose” to the beavers last year and look what happened

      – “Sports is about fair competition between near equals” Strange definition. Underdogs win all of the time (see above) and perhaps even more so in college sports.

  5. Oryx 09/03/2012

    I certainly find this practice pathetic. Anon. above writes “I don’t see anything wrong with paying teams to visit as they have to incur significant expense [to come play].” The amount paid (nearly $1 million) is obviously not intended to offset the cost of travel. Rather, in this and similar arrangements at many universities, it’s a payment to offset the humiliation of (probably) being beaten badly, which the podunk team laps up to help fund its overall athletic program, since it typically doesn’t have much revenue of its own. It reminds me of news stories a few years ago of people paying homeless people to beat each other up for entertainment, which the homeless readily did to get money. Yes, the people who paid for this are pathetic and revolting.

    Hey — it just occurred to me that the UO football team could save a million dollars by buying homeless people (much cheaper) to tackle — after all, if one wears a football jersey, this is considered morally upstanding.

    And spare me the insight that occasionally the ‘underdog’ wins — sure they do, but the odds, by far, are that they don’t. UO football isn’t paying a million dollars for a fair fight.

    Oh, right: Go ducks!

    • Anonymous 09/03/2012

      UO collects significant ticket receipts for a football game. It would be very unfair for the visiting team not to share this benefit (and therefore they wouldn’t bother coming). Plain and simple.

      It sounds like your beef is with the fans buying the tickets. Hence the stupid homeless person analogy.

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