soccer ball

World Cup Soccer and Game Theory

Dec 7, 2010 • Behavioral Economics, Thinking Economically • 180 Views    No Comments

Economists can explain more about soccer than we might expect. Why, for example, do players rarely kick down the middle when taking a penalty?

This takes us to “The Prisoners’ Dilemma.” Please assume that when arrested, two bank robbers do not know whether the police were aware of additional crimes they committed. When each is individually questioned, he knows that if his partner remains silent neither will recent a longer sentence. However, if one confesses, the silent person will get extra years in prison because he did not confess. The prisoner has a dilemma. What will the other person do? 

So too with a soccer penalty kick. Left, right or center? Both the goalie and the kicker face the prisoners’ dilemma.

Analysts point out an anomaly, though. A center kick is rare. Why? The incentives are different. For the goalie, if he expects a center kick, he just stands still. It is much more embarrassing to stand still when you are wrong than to lunge to the right or left.  Kickers also do not want to be wrong when they kick down the center.

Two basic economic ideas, self-interest and incentives, and an economic game theory, “The Prisoners’ Dilemma,” are central to penalty kick decisions.

The Economic Lesson

Economists like to tell us that businesses that are large and dominate a market with 3 or 4 other firms also have “The Prisoners’ Dilemma.” Called oligopolies, these large firms are constantly wondering what the competition will do when they make their own decisions. 

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