Tom Brady’s Footballs: Modelling the Optimal Level of Rule Evasion
21 Pages Posted: 29 Jan 2012 Last revised: 22 Jul 2020
Date Written: June 19, 2014
Abstract
Cheating, defined broadly as “rule evasion,” occurs in many different domains, including the world of sports. But cheating is also rampant “off the field” as well. Consider the transnational FIFA corruption case or the massive manipulation of the London Interbank Offered Rate (the Libor scandal), just to name two notable examples. These examples of cheating in sports and in business pose a fundamental question: Are these business scandals rare outliers, isolated incidents, or are they the proverbial tip of the iceberg? This paper will propose a “contagion model” of cheating or rule evasion. (The Appendix contains two additional models of such behavior: a Markov model and a game-theoretic or strategic model.)
Keywords: models of evasion and compliance
JEL Classification: K42, L51
Suggested Citation: Suggested Citation