Yesterday JC Bradbury wrote a column explaining how the steroid issue in baseball is probably not going to impact the long-run financial health of the game. This analysis was based partly on The Wages of Wins. Today Bradbury has a column in the New York Times which details how baseball could eliminate steroids from the game. This column, as Bradbury explains at Sabernomics, is based on Chapter Nine of The Baseball Economist (which will be available in paperback in February). Bradbury’s solution is original, based on solid economics, and would more than likely work.
In an effort to clean up the game, it is tempting to suggest the standard solutions that strengthen old rules and increase monitoring and punishments. The problem is that the scofflaws are always one step ahead of the police. We need a deterrence system that uses incentives to limit drug use.
This is from my Op-Ed in today’s New York Times: Let Baseball Players Police Themselves. My proposal is based on analysis that I present in Chapter 9 of The Baseball Economist. I offer two main suggestions that I believe would help reduce performance-enhancing drug use in baseball by getting incentives right.
First, I suggest a system of fines and bonus. This is a Pigouvian tax and subsidy system that taxes players in accordance with the external costs that users impose on non-users-users may feel the personal benefits of a higher salary outweigh the health risks-and then transfers the financial gains to non-users who earn relatively less due to the fact that they chose to remain clean. This has the deterrence effect similar to suspensions; however, the substantial fine revenue gives players who feel they are in a use-or-lose situation an incentive not to use and to identify new cheating methods.
Second, I propose handing over all monitoring and testing to the players. It is the players who suffer the most from steroids. They are in an arms races where steroids make no individual relatively better than any other player-hence, there is no financial gain-yet, users end up suffering health consequences. This resembles a prisoner’s dilemma game.
I feel that one of the reasons that players have been reluctant to submit to a testing program, despite their desire to prevent steroid use, is that the tests contain sensitive information beyond the use of performance-enhancing drugs. For example, owners would like to know what recreational drugs players are taking that might diminish their performances. Owners have an incentive to want players to use performance-enhancing drugs if it makes the players they hire better, and thus brings in more fans. I’m not saying that owners don’t care about other things, but money is certainly important to them. Marvin Miller has gone so far as to accuse owners of providing performance-enhancing drugs to the players in the past.
“In most locker rooms, most clubhouses, amphetamines – red ones, green ones, etc., were lying out there in the open, in a bowl, as if they were jellybeans,” he said. “They were not put there by the players, so of course there was no pressure to test. They were being distributed by ownership. I can’t remember ever having a proposal from the owners, that we’re going to have random testing or testing of any kind.”
I feel that the early drug-testing programs pushed by the owners were more about preventing recreational use than performance-enhancing use. Players, of course, like it when their peers use drugs to dampen performance. For this reason, the players are suspicious to have the owners involved. And the seizing of supposedly-anonymous drug tests by federal authorities in 2004 made players even more suspicious of what could happen to the samples they provide. Thus, I believe giving players full control will allow the players to adopt more rigorous testing procedures. It has the further advantage of assigning responsibility to a single party.