Summary of Beautiful Game Theory

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Rating

8

Qualities

  • Analytical
  • Innovative
  • Concrete Examples

Recommendation

Theories about economics and human behavior are notoriously difficult to test and analyze in a real-world setting. According to economist Ignacio Palacios-Huerta, soccer provides a useful laboratory and ample data for explaining economics. He argues that “the beautiful game” has a number of valuable characteristics that make it perfect for analyzing elements of human behavior, game theory and the efficient market hypothesis, and he extracts a number of pioneering and remarkable results from his research. While this is very much an economics text that uses soccer as its springboard, it offers plenty of sports anecdotes and trivia to broaden its appeal to those with little interest in deciphering technical economic texts. getAbstract believes this extended metaphor, with its unlikely fusion of subjects, will intrigue sports fans and economists alike.

About the Author

Ignacio Palacios-Huerta is a professor at the London School of Economics.

 

Summary

Game Theory in the Penalty Box

In 1890, when Northern Irish businessman and soccer goalkeeper William McCrum first bounced around the idea of instituting a penalty kick, players, the press and the game’s administrators greeted it with fierce opposition and protest. The penalty kick as a punishment for foul play did not emerge until 1929, and the Fédération Internationale de Football Association (FIFA), soccer’s governing body, didn’t replace the tie-breaking coin toss with the penalty shoot-out until 1970.

A penalty kick is an example of a zero-sum game. In game theory, a zero-sum game is one in which one player’s upside is always exactly offset by the other player’s downside, and vice versa. In 1928, scientist John von Neumann proposed the “minimax” theorem, which says that each player in a two-person, zero-sum game follows a “mixed strategy” of diverse, probability-weighted options that represent that player’s best possible outcome. Players try to minimize their own maximum losses and to minimize their opposition’s maximum gains. In a zero-sum game, no one shares the spoils: The kicker wants to score, and the goalie wants to prevent a goal.

Testing game theories...


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    W. K. 5 years ago
    The first impression is that the examples are limited to the highly formal setting of penalties and penalty shoot-outs, but the book seems to cover a broad range of topics, including the impact of the public on the referee, the introduction of three points for a win and reactions of supporters to hooliganism. All these latter topics seemed to be discussed more as statistical analysis, and not so much from a theoretical point of view.
    The analysis of the penalties seem to be at the aggregate level, not analysing the individual preferences and succes probabilities.
    I think the book could be a rich source to teachers of economics showing the aplicability of economic reasoning to every day life situations.
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    M. B. 5 years ago
    I like the idea in principle, but with other fundamental principles out there particularly related to gamification it would be handy if he used it with reference to the ground setting work. However, the ideas in terms of randomness and it's importance are very useful. Over all - I liked it as I am a bit of a sports fan..
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    M. O. 5 years ago
    I have always been fascinated by game theory. Sometimes I don't have time to read an entire book about it, as I need to stop frequently to analyze and understand topics in this subject matter. This abstract paper on the Beautiful Game Theory book is an impressive example of how economic theories apply to real-world situations, in this case, soccer. The summary is very thorough and fascinating!