Sports fans all over the world have recently witnessed an increasing number of spectacular doping cases, leading to considerable annoyance in the public. However, our knowledge regarding the prevalence of doping is still quite limited, leading some people to speculate that (nearly) all professional athletes are doped and possibly even have to be doped to be good enough to compete successfully in highly selective tournaments. On the other hand, particularly representatives of the sports associations pretend that since the number of positively tested athletes remains small, there are only a few "black sheep," while in general, the world of sport is clean and fair. In the recent past, a number of theoretical models have been developed that can be empirically tested, which, in the end, may lead to the formulation of policy recommendations (ranging from higher sanctions to legalizing doping). We review the more important models and present anecdotal as well as some quantitative empirical evidence on the prevalence as well as the determinants of doping. (JEL K42, L83, M52)
It is commonly acknowledged that rankorder tournaments not only have desirable features--such as inducing high effort levels among participants--but also share characteristics that can be quite problematic: the more skewed the structure of the rewards is, the more incentives the contestants have to engage in activities that are not in the interest of the organizer (Lazear and Rosen, 1981; Nalebuff and Stiglitz, 1983; O'Keefe, Viscusi, and Zeckhauser, 1984). Examples of such activities include plagiarism and manipulation of research results by academics, fraudulent accounting by managers, mobbing and sabotage by "normal" employees competing for a promotion, and the use of steroids and other performance-enhancing drugs by professional athletes. What all these situations have in common is that a number of individuals compete for a given winner prize (be it a tenure-track position, a significant pay increase, an appointment to an attractive position, or a gold medal). Moreover, in each of these situations, the contestants usually have the opportunity of increasing their individual success probabilities by developing activities that are illegal and, therefore, unacceptable. The economic consequences of these kinds of behavior can be quite significant as it will very often lead not only to a misallocation of talent but also to a decrease in incentives, given that contestants can observe the "cheating"1.
Since individual athletes can improve their probability of winning not only by the right kind of training but also by using banned or illicit substances that enhance performance, it is difficult to distinguish between performance that is to be attributed to talent and hard work and performance that is due to illegal preparation, that is, doping (cf. Preston and Szymanski, 2003, pp. 612-613). Assuming that event organizers as well as spectators have a preference for "clean" athletes,(2) separating the two sources of performance is crucial for obvious reasons: as can be currently seen in one of the most doping-prone disciplines--professional cycling--sponsors as well as fans seem to be disgusted by the behavior of many (possibly even most) riders.(3) While the former reduce their financial support or withdraw completely from the sport (like the owner of the Swiss top team "Phonak"), the latter increasingly refuse to watch the races either live or on television (during the recent 2006 Tour de France--the most prestigious multistage race--TV ratings plummeted to a record low in most European countries).
After a brief review of the history of doping methods and scandals (Section II), the article proceeds as follows: in Section III, we compare different microeconomic approaches to modeling the behavior of rational athletes; Section IV presents some empirical evidence consistent with the theoretical reasoning; and Section V concludes. …