Among the jokes told about economists is that we are excellent at predicting the past but a lot iffier on predicting the future. So it’s nice to see plain vanilla economics, the same used by the O’Bannon experts, yield an accurate prediction of competitive behavior, and to predict it *before* it happened.
If you followed the O’Bannon case, you know that a centerpiece of the economic arguments of the Plaintiffs’ argument was that if competition for players’ pay is stifled by competition, non-price competition by other means increases. Hence, argued Roger Noll and my business partner (and occasional Sportsgeekonomics contributor) Dan Rascher, we see excessive spending on coaches and on facilities because every dollar spent there provides a second-rate way to attract talent, better than doing nothing, but less good than direct compensation.
Anyway, as you may know, the NCAA was recently shamed (or, in some versions of the story, utterly coincidentally decided on its own) to allow unlimited food to athletes, after Shabazz Napier famously told the press during the lead-up to Final Four that he went to bed hungry some nights.
As economics predicts,once that little opportunity to compete was opened, we should expect to see the process of competition begin to work its magic. As exhibit A, I give you the new Auburn food-hall-as-recruiting-tool video:
That is just yummy inefficient substitution in action!
And where there’s competition in the NCAA, you can expect collusion in an effort to stop it to follow close behind:
Multiple sources: some universities already complaining to NCAA about increased food budget 4 athletes and asking for some kind of meal cap.
— Charles Robinson (@CharlesRobinson)July 17, 2014
It’s nice to see theory borne our in practice. It’s less nice to see an industry so accustomed to treat the competitive process as a bug to be squashed rather than a feature to be celebrated.