Mind Your Decisions

For people who want more substantive ideas about the topic: they talk about "positive leverage" and compare the situation to what you encounter in a hostage crisis. In economics, this is actually called the "Patient Seller" model, or the "Rubinstein Bargaining Model" - it's a basic element of Game Theory and comes out of John Nash's famous "Nash Equilibrium" (see: Russell Crowe in the movie Beautiful Mind!).

Basically, when you work in (for example) sales and have to periodically negotiate new contracts with buyers, you learn that this model is intuitive and in practice really stands up to scrutiny.

Here's a quote from a good write-up on the subject:

"What determines the final selling price? The key observation is that patient players give up less at each negotiating step because they see more value in future dollars. Therefore, their strategies are represented by flatter lines. Impatient players want the deal done quickly, and their strategies are represented by steeper lines."

Quote Source: http://mindyourdecisions.com/blog/2008/07/15/why-patience-pays-off-in-negotiations/

Since La Liga can't price discriminate easily

Sports broadcasts are massively price discriminated, however, which is probably the whole point of this bruhaha.

Pubs in the UK, for example, pay a much higher fee (something like 15'000£ a year[1]) than households (which I believe is in the 50Quid range a month) for the right to publicly broadcast the games.

It's probably such shenanigans (using a home subscription to show in the pub) that they're trying to fight. Not that I agree with the methods, mind you.

This, btw, explains why you see a beer glass in the corner of sports broadcasts in English pubs[2]. At least the ones that are properly licensed.

[1] https://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/11038992/More-pubs-get-sport-from-BT-than-Sky.html

[2] https://mindyourdecisions.com/blog/2016/12/13/game-theory-applied-why-is-there-a-pint-glass-in-the-corner-of-tvs-at-pubs/

e: spello

I was gonna post a comment saying what they meant was obvious, but then I just went "ohhhh." * That's actually quite an annoying little problem there.

One work-around might be to add rules to the exchange forbidding the placing of multiple bids by the same entity at the same price, and then allocating randomly.

This is also reminding me of the Talmud's descriptions of how to pay off debtors when there isn't enough money to go around: http://mindyourdecisions.com/blog/2008/06/10/how-game-theory-solved-a-religious-mystery/ Such a system could work for exchanges too, although it still encourages over-bidding.

Surely also over-bidding has its own risk/reward curve so it would be reasonable to allocate pro-rata and let people work out how much to over-allocate.

* And realised what the implications were.

Sky Sports use a far simpler solution that doesn't violate anyone's privacy.

The satellite feed that's licensed for public venues has a small beer glass logo burned in to the image. The amount of beer in the glass changes every day on a pseudorandom basis. An inspector can check whether a pub has the right license simply by looking at the screen - if the glass is missing or contains the wrong amount of beer, it's an unlicensed stream. It's plausibly hackable by a sufficiently motivated person, but it's a remarkably simple and effective deterrent.

https://mindyourdecisions.com/blog/2016/12/13/game-theory-applied-why-is-there-a-pint-glass-in-the-corner-of-tvs-at-pubs/