Football Economics:
The Trade-off’s That Make the Game
Introduction
Economics is the science of scarcity; the fact of scarcity means that we cannot have an
unlimited supply of everything.
Even elite athletes, major universities, and professional team owners must make
decisions based on limited resources.
A coach cannot assign a talented athlete to play two positions nor can he use his practice
time to review every possible on-field contingency.
These choices are trade off’s between an preferred alternative and the second best
alternative, also referred to as the opportunity cost of the choice.
The wisdom, or lack thereof, of their off-the-field decisions make, or break, the success
on the field.
In economics, we analyze some of these choices through the Production Possibilities
Frontier.
Football Economics:
The Trade-off’s That Make the Game
College Football: The Producers
The Athlete
• Grades
• Positive Image
for the School
• Success for the
team
• Positive
impressions for
the pro-scout
• Entertainment
for the fans.
The Coach
• Wins
• Positive image
for the school
• Graduating
players
The
Administration
• A winning
football
program
• Superior
academics
• Other winning
sports
programs
Football Economics:
The Trade-off’s That Make the Game
Professional Football: The Producers
The Athlete
The Coach
• Positive image
for the team
• Success for
the team
• Side
endorsement
deals
• Entertainment
for the fans.
• Wins
• Positive image
for the team
The Owner
• Profits in
football
• Profits in
other
businesses
Football Economics:
The Trade-off’s That Make the Game
The Production Possibilities Frontier (PPF)
The Production Possibilities Frontier is an analytical framework that helps us visualize and
calculate trade-off between different things a person, a business, or a society might
produce.
The classic example comes from the Bible, “They will beat their swords into plowshares
and their spears into pruning hooks.” The verse refers to peace under the Messiah. In
the economics example, a society has a scarcity of the metals needed for both products
and must, literally, trade one for another. Thus, the opportunity cost of one pruning hook
might be the one two spears that have to be melted down and reshaped to form it.
This concept works with any two items that share a common link in the production
process. For example, Selena Gomez may be able to make either two films or two albums
in one year but he cannot make both. She lacks the time necessary to create all four. On
the other hand, she might have the options to make two films or two albums or one of
each. In this case, she faces an opportunity cost for each film equal to the cost of the
album she didn’t create.
The PPF also applies to football trade-off’s.
Football Economics:
The Trade-off’s That Make the Game
Production Possibilities Frontier: Classic Example
Number
of
Pruning
Hooks
The PPF of the nation
shows the trade off
between producing spears
and pruning hooks.
Number of Spears
Football Economics:
The Trade-off’s That Make the Game
Production Possibilities Frontier: Basic Example
A’s per
semester
The PPF of the student
athlete shows the trade-off
between A’s in class and
touchdowns on the field.
Touchdowns
per semester
Football Economics:
The Trade-off’s That Make the Game
PPF: Constant Opportunity Costs
A’s per
semester
(5 A’s, 0 TD’s)
The PPF of the student athlete shows the trade-off
between A’s in class and touchdowns on the field. In
this case, we assume a constant trade of 2 touchdowns
for one A. This produces a straight line PPF. If the
football player wants an earn an A, he will have to give
up some practice time. If he wants to learn his
playbook or increase his strength and speed, he has to
give up the study time that would otherwise be used to
obtain an A in class.
(0 A’s, 10 TD’s)
Touchdowns
per semester
Football Economics:
The Trade-off’s That Make the Game
PPF: Constant Opportunity Costs
A’s per
semester
(5 A’s, 0 TD’s)
(4 A’s, 2 TD’s)
The PPF of the student athlete shows the trade-off
between A’s in class and touchdowns on the field. In
this case, we assume a constant trade of 2 touchdowns
for one A. This produces a straight line PPF. If the
football player wants an earn an A, he will have to give
up some practice time. If he wants to learn his
playbook or increase his strength and speed, he has to
give up the study time that would otherwise be used to
obtain an A in class.
(1 A, 8 TD’s)
(0 A’s, 10 TD’s)
Touchdowns
per semester
Football Economics:
The Trade-off’s That Make the Game
PPF: Constant Opportunity Costs
A’s per
semester
(5 A’s, 0 TD’s)
(4 A’s, 2 TD’s)
The PPF of the student athlete shows the trade-off
between A’s in class and touchdowns on the field. In
this case, we assume a constant trade of 2 touchdowns
for one A. This produces a straight line PPF. If the
football player wants an earn an A, he will have to give
up some practice time. If he wants to learn his
playbook or increase his strength and speed, he has to
give up the study time that would otherwise be used to
obtain an A in class.
(3 A’s, 4 TD’s)
(2 A’s, 6 TD’s)
(1 A, 8 TD’s)
(0 A’s, 10 TD’s)
Touchdowns
per semester
Football Economics:
The Trade-off’s That Make the Game
Constant or Increasing Opportunity Costs
Constant opportunity costs occur when the exchange rate between our two products
(spears or pruning hooks; A’s or touchdowns) are always the same. The 9th and 10th
touchdown cost the athlete the same price (one A) as the 1st and 2nd touchdown (one A).
Increasing opportunity costs occur when the exchange rate between two products
changes based on how many have already been achieved. What if the straight A athlete
could trade away one A for his first 6 touchdowns, but he would have to trade away his
4th and 5th A just to add one final touchdown? This would mean the opportunity cost of
each touchdown is more expensive than the previous.
Football Economics:
The Trade-off’s That Make the Game
Constant or Increasing Opportunity Costs
Options with Constant
Opportunity Costs
Options with Increasing
Opportunity Costs
TD’s
A’s
TD’s
A’s
10
0
13
0
8
1
12
1
6
2
12
2
4
3
10
3
2
4
6
4
0
5
0
5
Football Economics:
The Trade-off’s That Make the Game
PPF: Increasing Opportunity Costs
A’s per
semester
(5 A’s, 0 TD’s)
The PPF of the student athlete shows the trade-off
between A’s in class and touchdowns on the field. In
this case, we assume an increasing opportunity cost
and the PPF takes on a curved shape. This reflects the
more common, real-life case that each additional A or
each additional TD is more difficult to obtain.
(0 A’s, 13 TD’s)
Touchdowns
per semester