The Bidding Paradox: Why Rational Politicians Still Want to Bid for Mega Sports Events

de Nooij, Michiel; van den Berg, Marcel

doi:10.2139/ssrn.2314350

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The Bidding Paradox: Why Rational Politicians Still Want to Bid for Mega Sports Events

Tjalling C. Koopmans Research Institute Discussion Paper Series nr: 13-09

24 Pages Posted: 29 Aug 2013 Last revised: 11 Apr 2018

See all articles by Michiel de Nooij

Michiel de Nooij

Michiel de Nooij Economic Research and Advice

Marcel van den Berg

Statistics Netherlands

Date Written: August 22, 2013

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.

Keywords: bidding, mega sport events, Olympic games, lobbying, happiness

JEL Classification: D61, D72, H54, L83

Suggested Citation: Suggested Citation

de Nooij, Michiel and van den Berg, Marcel, The Bidding Paradox: Why Rational Politicians Still Want to Bid for Mega Sports Events (August 22, 2013). Tjalling C. Koopmans Research Institute Discussion Paper Series nr: 13-09, Available at SSRN: https://ssrn.com/abstract=2314350 or http://dx.doi.org/10.2139/ssrn.2314350