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The bidding paradox: why rational politicians still want to bid for mega sports events

Author

Listed:
  • M. de Nooij
  • M.R. van den Berg

Abstract

This paper discusses reasons why politicians still favor hosting mega events despite the discouraging evidence regarding their financial benefits: (1) early political enthusiasm, (2) tying side-projects to the bid to raise political support, (3) biased reading of history, (4) the winners curse, (5) redistribution and lobbying, (6) a media bias in favor of hosting and (7) boosting happiness and pride of residents. Bringing happiness to the people might be a valid reason for hosting a mega event, however, economists are yet insufficiently capable of capturing this effect. Moreover, alternative explanations for political support cannot be deemed invalid ex ante.

Suggested Citation

  • M. de Nooij & M.R. van den Berg, 2013. "The bidding paradox: why rational politicians still want to bid for mega sports events," Working Papers 13-09, Utrecht School of Economics.
  • Handle: RePEc:use:tkiwps:1309
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    File URL: https://dspace.library.uu.nl/bitstream/handle/1874/309788/13_09_2.pdf
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    References listed on IDEAS

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    1. Stefan Szymanski, 2002. "The Economic Impact of the World Cup," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 3(1), pages 169-177, January.
    2. Andrew K. Rose & Mark M. Spiegel, 2011. "The Olympic Effect," Economic Journal, Royal Economic Society, vol. 121(553), pages 652-677, June.
    3. Kavetsos, Georgios & Szymanski, Stefan, 2010. "National well-being and international sports events," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 158-171, April.
    4. Victor Matheson, 2006. "Mega-Events: The effect of the world’s biggest sporting events on local, regional, and national economies," Working Papers 0610, College of the Holy Cross, Department of Economics.
    5. Thaler, Richard H, 1988. "Anomalies: The Winner's Curse," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 191-202, Winter.
    6. Harry Walton & Alberto Longo & Peter Dawson, 2008. "A Contingent Valuation of the 2012 London Olympic Games," Journal of Sports Economics, , vol. 9(3), pages 304-317, June.
    7. Philip K. Porter & Daniel M. Chin, 2012. "Economic Impact of Sports Events," Chapters,in: International Handbook on the Economics of Mega Sporting Events, chapter 15 Edward Elgar Publishing.
    8. Michiel de Nooij & Marcel van den Berg & Carl Koopmans, 2013. "Bread or Games?," Journal of Sports Economics, , vol. 14(5), pages 521-545, October.
    9. Dennis Coates & Brad R. Humphreys, 2008. "Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?," Econ Journal Watch, Econ Journal Watch, vol. 5(3), pages 294-315, September.
    10. Robert A. BAADE & Robert W. BAUMANN & Victor A. MATHESON, 2010. "Slippery Slope ? Assessing The Economic Impact Of The 2002 Winter Olympic Games In Salt Lake City, Utah," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 81-92.
    11. Coates, Dennis & Humphreys, Brad R., 2003. "The effect of professional sports on earnings and employment in the services and retail sectors in US cities," Regional Science and Urban Economics, Elsevier, vol. 33(2), pages 175-198, March.
    12. Wladimir Andreff, 2012. "The Winner’s Curse: Why is the Cost of Mega Sporting Events so Often Underestimated?," Chapters,in: International Handbook on the Economics of Mega Sporting Events, chapter 4 Edward Elgar Publishing.
    13. Richard Tomlinson & Orli Bass, 2012. "The BRICs: National and Urban Legacy Agendas," Chapters,in: International Handbook on the Economics of Mega Sporting Events, chapter 18 Edward Elgar Publishing.
    14. Dennis Coates, 2007. "Stadiums And Arenas: Economic Development Or Economic Redistribution?," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 565-577, October.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. What are the arguments for hosting sports mega-events?
      by Economic Logician in Economic Logic on 2013-10-10 19:46:00

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    Cited by:

    1. de Boer, Willem I.J. & Koning, Ruud H. & Mierau, Jochen O., 2017. "Ex-ante and ex-post willingness-to-pay for hosting a major cycling event," Research Report 17013-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).

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    Keywords

    Bidding; mega sport events; Olympic games; lobbying; happiness;

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