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Evolutionary Sports Economics
AUTHORS
IN THIS ARTICLE
Economy Sports
Jason Potts
Jason Potts
is an evolutionary economist at RMIT University.
Stuart Thomas
Stuart Thomas
is an applied economist at RMIT University.

Sports are an old part of human culture and new part of the economy.[1] Culture evolves and economies evolve—two more or less incontrovertible propositions in the social sciences these days—so it shouldn’t really be such a leap to suggest that sports also evolve.

Yet here we are, without a clear sense of what that might even mean. There is not much around that we might recognize as an evolutionary sports economics. So let us take some steps toward establishing that new field right here, in this very essay.

There are two basic ways to develop a Darwinian approach to sports. One way is to look for evolutionary explanations for the characteristics of sports in terms of the observation that the players and spectators are all shaped by evolutionary forces. That is to trace evolution through the players into the sports. There are a lot of interesting angles on this, particularly around individual displays of fitness,[2] sexual selection,[3] understanding the limits of sports performance,[4] and as a site for testing multi-level selection theory.[5]

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An evolutionary focus on sports gives us insight into human nature. Biologist Michael Lombardo observes that “despite the fact that sport is a human universal, participation and spectatorship is male-biased.”[6] He develops a theory in which sports “developed to act primarily as a lek  (an instinctive animal behavior to show off fitness) where athletes display and male spectators evaluate the qualities of potential allies and rivals.” Lombardo’s theory also makes predictions about how sports evolve as “men invent new sporting events to avoid competing at sports where they are likely to lose.” So that approach gives us evolutionary insight into how sports themselves develop. Useful.

But another way, and the way we favor here, is to conceive of sports themselves as evolving. But to make sense of that we’re going to need answers to basic questions like what actually is evolving? What are the units of variation, selection and replication?

Why is Sports Economics not an Evolutionary Science?[7]
There has been sports economics since 1956, when Simon Rottenberg applied economic analysis to the labor markets of sports teams. Since then, sports economics has developed as a subfield of applied neoclassical microeconomics built on the idea of analyzing the economic organization of the professional leagues of team sports (football, baseball, basketball, and so on), more or less arguing that they behave a lot like other competitive market and industries. Modern sports economics also tracks other basic economic arguments about public goods, externalities, marginal value pricing, and so on, to the particular concerns of, in prime instance—who pays for my stadium and what is that player worth? Sports really are big business, so economists have carved off a niche but serious subfield answering those sorts of questions.

The broad connection between sports and the development of market capitalism has also been noted,[8] particularly around the emergence of the sporting club as a voluntary association that broke free of the state and was thus able to adapt and evolve.[9] So sport is part of any big history story.

Our angle here, however, starts in none of these positions. We are not concerned with an evolutionary explanation for human preferences for sports, nor their role in sexual selection. Nor are we concerned with what industrial organization theory or game theory might further teach us about the value of the Mets latest trade, or whether the rate-payers of Ann Arbor really should have bought that new stadium.

To make an evolutionary economics of sports, we start with two basic observations and one primary idea. Observation 1: there are many sports—5000 or so it seems—and each sport has a number of players and spectators.[10] These are the analogue of species and populations. Observation 2: new sports emerge when a population goes above zero, and old sports die when the population of the sports species goes to zero. Observation 3: all sports involve people, rules, and kit; sports evolve when the people change, but also when the rules and kit changes too.

The primary idea, then, is that a sport has an evolutionary economic trajectory—a phylogeny—that is similar to any Schumpeterian technological trajectory in that it begins with entrepreneurial innovation, grows as the sport is adopted through a carrier population, and then stabilizes at some level in the broader environment.[11] In a suite of recent papers, we outline how this can be observed through the technological evolution of windsurfing.[12] So, to get this going we need a taxonomy of sports.

Observation 3 suggests a basis for taxonomy. We can make a natural history of sports with a taxonomy of the origin of the sport—an analogue of phyla—by whether the sport originates with rules, and from which technology (i.e. kit) is added; or whether it happens the other way, such that the sport begins with technology, and then rules are added.

So the foundation of evolutionary sports economics is the observation that a sports is made of rules + technologies. There are then two types of sports, and they are differentiated by their evolutionary origins: (1) those that originate in new rules– in which the rules (over some arbitrary activity) come first, and then new technologies are added to develop the sport; and (2) those that originate in new technologies – in which a new technology creates some arbitrary possibility, and then rules are added to make it into a competitive sport.

Rules-first sports
Examples of rules-first sports are largely those that have an origin in some manner of ritualistic or somewhat arbitrary activity that then became successively codified. Most incursion sports, as modeled on battle – where one team attempts to achieve an arbitrary goal (such as moving an arbitrary object, e.g. a ball, to an arbitrary point, e.g. into a fixed location net) in the territory of another team, who try to defend – are examples of rules-first sports, the rules being what the particular goal is and the constraints upon how it is to be achieved. These rules relate to the size of the field of play, the number of players, the permissible moves, the duration of the play, consequences for illegal play, the scoring system, and so on.

Most physical ability or marshal sports relating to artificial or stylized versions of natural activities that would be valued in some state of the world – running, jumping, throwing, fighting – are also rules-first sports, in that they define a basic standardized form of competition, say over a fixed distance, or for a fixed time, or with a given weighted object, and so on. The ancient Olympic games are the acme of this, as associated with the amateur ideals of a sport that is defined by timeless traditions and minimal ancillary equipment or technologies.

Rules-first sports develop as new technologies are added to the sport, but under the condition of conforming to the extant rules. Technologies may thus improve game-play by adding safety features (helmets, pads) or the speed of play, by making gear lighter or stronger, but usually within tightly prescribed limits (e.g. the size of a bat in baseball or cricket). Technologies can be added to improve detection of rule violation  (line-cameras in tennis), spectator immersion (radar guns in games in which interest turns on the speed or distance travelled of a ball at crucial moments in play, such as cricket or jai alai), or the reach of spectators (satellite broadcasting of games).

But it is still the same underlying game, which may retain a kind of pure unadulterated form, perhaps as played by children, or as a stripped-down street or beach version. The point is that the sport develops as technologies add to the characteristics of the game (e.g. the speed at which it is played, the scale at which it can be observed) but do not change the game. The new technology fits to the given rules.

Technology-first sports
Technology-first sports begin with a new capability or material – a piece of equipment or ‘kit’, such as the horse, automobile, surfboard, rifle, skis, crampons and ropes, hang-glider, bicycle – that makes it possible to do a new thing. This ‘new thing’ may have preexisting functional utilitarian purposes (e.g. transport, or hunting) or it may just be an unexplored or multipurpose potential arising from the new technology – such as plastics or carbon fibers, changing what can be done for aero-sports or on-water-sports.

A sport is created when this new technology is removed from that utilitarian purpose and rules are constructed for its competitive application to an arbitrary but well-defined purpose. An example of a technology-first sport is motor sport, where first comes the technological capability, and then rules are added to organize competition about a technology into a sport.

These rules may spontaneously self-organize, and then be codified, or they may be deliberately constructed by an entrepreneurial governing-body, and differentially adopted by others. The sport develops by adding governance to explore the possibilities of a technology. A rule-first sport is the opposite, it starts with rules, and the purpose of new technology is to explore the potential within those rules. A technology-first sport starts with a new technology, and the purpose of the rules is to explore the potential within that technology.

Technology-first sports tend to be younger and more recent, indeed most new sports are technology-first sports. Paradigmatic examples are windsurfing,[13] mountain-biking, snowboarding and skateboarding.[14] These sports began when amateur enthusiasts who had some engineering capabilities experimentally built their own equipment and tried to do new things, usually in a community context but with entrepreneurial consequences.[15]

Technology-first sports tend to develop in two phases: first, the formation of a community of users who pool and share information about technological developments; second, the development of rules for the governance of the new sport, often from the same group of users. This early adopter community forms the basis for new firms that emerge to commercialize the developing sport. They have an obvious stake in the provision of order to the new market, including standards and rules. In this way a sport develops through a process of economic evolution.

A research program for evolutionary sports economics
Of course few sports conform purely to this taxonomy, with rule changes to rules-first sports (e.g. changing the points in a try from 4 to 5 in Rugby Union in 1992), and new technologies coming into technology-first sports that radically change the sport, in effect creating a new sport. In an important sense many exemplars of rules-first sports (football, or athletic throwing sports) had a technology at the point of origin (a ball, a javelin). These represent different characteristic modes by which a sport comes into existence and develops, with differing roles and opportunities for entrepreneurs in respect of technology and governance.

This taxonomy suggests some hypotheses that might be tested. Do rules-first and technology-first sports display systematic differences that make them prone to characteristic dynamics and pathologies? Rules-first sports seem to be prone to rent-seeking and capture by insiders. Technology-first sports seem to be prone to overshooting and collapse due to capture by elite performers and the rents associated with innovation-competition and subsequent neglect of entry-level markets. Technology-first sports appear to experience significant variety in the early stages of the industry through exploration that will be prone to shake-outs when rules are still forming and there is uncertainty about the scale and scope of the sport as well as its technological possibilities. These patterns look similar to other evolutionary trajectories driven by explosions of early variety and then winnowing selection.

Evolutionary institutional economics is the natural analytic basis for the study of rule formation in new sports and evolutionary economics is the natural analytic basis for the study of technological dynamics in sports driven by entrepreneurship and innovation.

References
[1] Brasch R. (1970). How did sports begin? A look at the origins of man at play. New York: David McKay.

[2] De Block, A., Dewitte, S. (2009). Darwinism and the cultural evolution of sports. Perspectives in Biology and Medicine, 52(1), 1-16.

[3] Apostolou, M. (2015). The athlete and the spectator Inside the Man: A cross-cultural investigation of the evolutionary origins of athletic behavior. Cross-Cultural Research, 49(2), 151-173.

[4] Cordain, L., Gotshall, R., Eaton, S. (1998). Physical activity, energy expenditure and fitness: an evolutionary perspective. International journal of sports medicine, 19(5), 328-335.

[5] Kniffin, K. (2016). Did Darwin Read the sports section?  https://evolution-institute.org/article/did-darwin-read-the-sports-section/?source=tvol

[6] Lombardo, M. P. (2012). On the evolution of sport. Evolutionary Psychology, 10(1), 147470491201000101.

[7] Compare, Veblen, T. (1898). Why is economics not an evolutionary science? Quarterly Journal of Economics, 12: 373-89.

[8] Szymanski, S. (2010). Economists and sport history. Journal of Sport History, 37(1), 71-82.

[9] Szymanski, S. (2008). A theory of the evolution of modern sport. Journal of Sport History, 35(1), 1-32.

[10] Guttmann A. (2004). Sports: The first five millennia. Amherst, MA: University of Massachusetts Press.

[11] Earl, P., Potts, J. (2013). The creative instability hypothesis, Journal of Cultural Economics, 37, 153-73.

[12] Potts, J. Thomas, S. (2015) ‘How competitive evolutionary dynamics first created then ruined windsurfing’ SSRN http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2569408

Thomas, S, Potts, J. (2015). Industry sustainability under technological evolution: a case study of the overshooting hypothesis in sports, Procedia Engineering, 112, 562-7.

Potts, J., Thomas, S. (2015). The curious case for media monopoly in technology driven sports, Media International Australia. http://mia.sagepub.com/content/155/1/140.short

[13] Thomas S (2014) ‘Why does Sports Equipment sometimes get too sophisticated and expensive? A case-study of the overshooting hypothesis in sports’ International Joseph A Schumpeter Society conference, Jena, Germany.

[14] Shah S (2005), From innovation to firm formation in the windsurfing, skateboarding and snowboarding industries, University of Illinois working paper #05-0107

[15] Franke N, Shah S (2003). How communities support innovative activities: an exploration of assistance and sharing among end users, Research Policy, 32(1), 157-78.

Shah S, Tripas M (2007). The accidental entrepreneur: the emergent and collective process of user entrepreneurship, Strategic Entrepreneurship Journal, 1, 123–140.

2 Comments

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2 Comments

  1. Kevin Kniffin says:

    Great article — and happy to have learned more about windsurfing!
    From outside of economics, there is a literature on “play, games, and sport” that offers a broader taxonomic context for the pursuit that you’re starting/proposing in this article. One of the _relatively_ well-known early examples of that literature is:
    Play, games, and sports [by]
    B Sutton-Smith, JM Roberts
    Good luck with further development of your work — I’ll be among those looking forward to reading more.

  2. Joe RebholZ says:

    But why do people like sports? Sports are a form of cooperation. Even competitive sports are cooperation. Surely in team sports the two (or more?) teams are internally cooperating and the interactions between the teams are structured by preapproved rules that all participants follow. So the competition is cooperation. The purpose of a game is to see who can do something better, the participants are cooperating to see who can do something better. The spectators are admiring human excellence. The purpose of sports is not just to make money but also to develop and admire human excellence.