Corruption on the Court: The Causes and Social Consequences of Point-Shaving in NCAA Basketball

Abstract

This paper is concerned with the economic incentives of crime among agents within a private organization. Specifically, we present a contest model of a college basketball game to identify the winners, losers, and social welfare consequences of point-shaving corruption in men's NCAA basketball as an example of participation in illicit activities. It is shown that, under reasonable conditions, such activities lower the level of social welfare derived from college basketball play by reducing aggregate efforts in a game and distorting relative efforts across teams. We then examine the economic incentives of a player to point-shave and discuss player-types that are at a relatively high risk of engaging in point-shaving corruption. Private and public mechanisms to minimize corruption are compared in terms of efficiency, and a differential "honesty premium" is derived and discussed as an efficient way for the NCAA to decrease the incidence of player corruption.

Strategic Offsetting Behavior: Evidence From National Collegiate Athletic Association Men's Basketball

“…McCormick and Tollison (1984) used college basketball data to analyze the effect of an increase in the number of enforcement officials. Wolfers (2006) and Chang and Sanders (2009) analyzed the incentives for crime among agents within a private organization by studying point shaving in NCAA basketball. McGarrity and Linnen (2010) considered the same theoretical framework and considered the decision to pass or run in professional football games.…”

Policy and Policy Response on the Court: A Theoretical and Empirical Examination of the Three-Point Line Extension in Basketball

“…The game's fast (scoring) pace also leads to a large sample space of conceivable game scores and game-score margins such that basketball game betting markets are typically very active. Given that a standard basketball team features only 5 on-court players at a time, these same markets are highly-manipulable by players such that point-shaving corruption can arise at the college level-of-play (Chang & Sanders, 2009;Hoffer & Pincin, 2019;Paul & Weinbach, 2011;Wolfers, 2006). Further, player-level output in basketball is highly-measurable such that the sport allows for tests of labor market discrimination (Brown et al, 1991;Kahn, 2009).…”