Economics of Doping in Sports

Table of Contents:

Abstract

1. Introduction

2. Doping in sports
2.1. Short history of doping
2.2. Incentives to combat doping

3. Related literature and models

4. The model

5. IOC doping regulations

6. Ranking-based sanction scheme vs. IOC doping regulations
6.1. Perfect Mechanism
6.2. Cost effectiveness.

7. Conclusion

List of References.

Abstract

The paper “Economics of Doping”, analyzes the existing literature on the economic ramifications of using performance enhancing substances in sports. It gives a brief overview of the history and the underlying reasoning for taking doping. It also presents the main arguments against the use of stimulating substances. Then the paper makes critical analysis of the existing literature that presents economic models for dealing with the problem. Finally, it presents a model, which is compared to the current anti-doping regulations by the International Olympic Committee, and gives a valuable toolbox for possible economic measures for dealing with the doping problem.

1. Introduction

There is a long history of the use of performance enhancing substances in spots and life. Dated back to 3^rd century BC at the ancient Olympic Games and recorded by Philostratus and Galerius, doping seems to be an integral part of sports.^[1] In modern sports the first confirmed cases of doping use were in the 1950’s and 1960’s, with the deaths of athletes after the use of exogenous stimulating substances. These tragic events brought up the question of the use of performance enhancing substances as a serious problem of modern sport. The arguments against doping were that it is harmful to the human health; it alters the outcome of competitions and thus violates one of the most valued principles of sport – the fair-play. Another argument that is recently beginning to be considered as very important is that doping harms the image of sport, which lowers viewer’s interest and for that reason is economically damaging. All of these arguments are however questionable. Some authors suggest that doping is a natural evolution of sports and it actually does not need to be fought at all (later in the paper a case will be discussed that suggest that using doping actually increases welfare). This statement, however, is controversial and the dominant belief of both society and sport institutions is that doping should not be a part of modern sports, as it violates the main principle of the game and is in contradiction with the moral norms and sports ethics. Therefore, this paper will aim to determine the rationale behind the use of doping, and to present a feasible economic model that can effectively tackle the problem.

This paper concentrates on a model with two players with von Neumann Morgenstern preferences over winning and loosing the competition, who chose secretly and independently from each other to take or not to take drugs. There is also a favorite and an underdog i.e. their probabilities of winning the game are different. The model considers the so called race-day drugs, which are used right before the beginning of the competition and have immediate effect on the players’ abilities for the competition. The two-player game suggests sports in which there are only two athletes competing (e.g. boxing, marshal arts, etc.), however, this model can be used also for collective sports, where the two managers decide, whether their players will take drugs or not, as well as competitions where there are two players with considerably higher ability than the rest and only they compete for the win.

The paper first analyzes the game without doping opportunity, in order to determine the different strategies and no-doping equilibriums. An interesting result is that in mixed-strategy equilibrium the favorite player is more likely to take performance enhancing drugs, yet for some parameter values he is less likely to win.

The paper requires certain assumptions: doping never increases welfare; there exists no equilibrium that is more beneficial for the players in a game with doping possibility, than without; the less talented player might win with doping opportunity.

The analysis then reviews current anti-doping regulations enforced by the International Olympic Committee (IOC) and shows that they fail to implement the no-doping equilibrium for all parameter values. Then a ranking-based sanction scheme is introduced and it is constructed as the perfect mechanism that provides the no-doping equilibrium in all cases. Further analysis examines the cost of the tests that have to be used in order to get to the no-doping equilibrium of both the IOC rules and the ranking-based sanction scheme. The results that emerge from that are that IOC regulations are more costly, as they require more tests, compared to the ranking-based punishments, where in order to reach the lowest number of tests it is required only to lower the penalty for the loser to zero.

This paper is organized as follows. Section 2 gives an overview of the doping problem and a brief history. It also states and analyses the main arguments against doping. Section 3 presents other models and approaches to the doping problem. In Section 4, the model adopted from Berentsen (2002) will be presented, as well as the basic case of equilibrium, when no regulations apply. Current IOC regulations will be discussed in Section 5. Section 6 will present the ranking-based sanction scheme and compare it with current IOC regulations. Section 7 concludes the paper.

2. Doping in sports

In every living being’s life, competition among one another plays significant role. Competition might be different plants fighting for more sunlight, or male animals competing for the privilege to mate with a female. The same fact holds for humans too. Man is competing on every aspect of life with other contestants by using his own advantages and traits. However, it is considered morally unethical to use exogenous advantages, such as drugs, lies, deception, and manipulation, which can be referred to as doping. This paper will consider the use of performance enhancing drugs in sports.

2.1. Short history of doping

In every competitive game where at stake are honor, prize, status or equally desirable outcomes, the contestants are always willing to do anything to win. Doping in ancient sports was conducted by using various plant-made drugs, which increased athletes’ performance.^[2] The use of illegal substances can even be traced back to biblical times, when Adam and Eve ate the forbidden fruit to gain godlike powers.^[3] However, the application of doping in modern sports began to be recognized roughly in the 1950s and 1960s, when the pharmaceutical industry began to peak. The first known cases of illegal use performance enhancing drugs occurred during several European cycling and track races. Most notable were in 1960 Rome Olympic Games, when the Danish cyclist Knud Enemark Jensen died of amphetamine usage, and in 1967 Tour de France, when the cyclist Tom Simpson died also after using the same illegal substance.^[4]

The first attempt to establish anti-doping regulations was made in 1928 by the International Amateur Athletic Federation which banned the use of stimulating substances. The IOC (International Olympic Committee) stated in 1938: “The practice of doping is to be condemned utterly, and any person accepting or offering to supply dope should not be allowed to enter amateur meetings or the Olympic Games.”^[5] The first test for illegal substances was conducted in 1968 during the Winter Games in Grenoble and the Summer Games in Mexico, following the first disqualifications on grounds of using doping.^[6]

2.2. Incentives to combat doping

Despite the fact that drug testing systems have developed immensely over the years, doping is continuously increasing in both professional and amateur sports. Doping in sports has gained and image of not only detrimental to the health of the athletes but is also a pernicious to the image of sports.

The health argument is essential for the doctrine of anti-doping organizations. All drugs, even the most advanced, produce side effects. While these effects are considered acceptable when they are used for therapeutic reasons, their use as a means for boosting performance of athletes is viewed as detrimental to health.^[7] Therefore WADA (World Anti-Doping Agency) under the leadership of the IOC introduced in 1963 the Prohibited List, which identifies substances and methods prohibited in-competition and out-of-competition.^[8] The list however, does not universally ban a particular drug, as it allows the use of some for medical reasons, thus becoming not entirely convincing tool in the war against doping. Also, some of the banned substances are naturally produced by the human body, for example, erythropoietin (EPO), growth hormone (GH), and human chorionic gonadotrophin (hCG). This means that the test should differentiate between the pharmaceutical and natural form, but in reality it does not.^[9] This enables false-positive or false-negative test results to occur and further puts into question current anti-doping regulations. It is also considered that professional sport itself is dangerous to human health^[10] and some of the stimulants that are deemed illegal actually help the athletes to cope with the ever increasing physical demand of modern sports. This statement makes the health argument against the use performance-enhancing not so convincing.

[...]

^[1] See Berentsen (2002), p. 109.

^[2] See Burns (2006), p. 188.

^[3] See Bahrke/Yesalis (2002), p. 1.

^[4] See Burns (2006), p. 188.

^[5] See Thieme/Hemmersbach (2009), p. 7.

^[6] See Müller (2009), p. 8.

^[7] See Mottram (2005), p. 11.

^[8] See World Anti-Doping Agency – Prohibited List

^[9] See Berentsen (2002), p. 111.

^[10] See Eber (2009), p. 346.