What Economists Can Teach World Cup Coaches

Does economic theory have anything to offer a coach in the World Cup? And if it did, would Diego Maradona have cared?
Diego MaradonaPierre-Philippe Marcou/Agence France-Presse — Getty Images Diego Maradona, who coaches Argentina’s national soccer team.

The answer to the second question is probably “no.” But, in a paper issued by the Ifo Institute for Economic Research in Munich, Alexander Ebertz and Marc Gronwald argue that the notion of evolutionary finance may help explain why certain styles of soccer seem indomitable for a time, only to eventually be usurped by a new strategy.

As described by the authors, evolutionary finance regards financial markets as a competition not so much among individuals as among strategies. In Darwinian fashion, strategies constantly adapt and mutate, and no strategy can be assured of long-term success. Rather, an investment strategy is only superior until another evolves that is better. Successful strategies must always be seen in light of competing strategies.

So it is with soccer, Mr. Ebertz and Mr. Gronwald argue. They note that various soccer strategies have been hailed as modern and superior, only to be supplanted by new methods of play.

Currently, Mr. Ebertz and Mr. Gronwald write, commentators seem to believe that the most effective style is that practiced by top clubs like Munich Bayern, FC Barcelona and the Spanish national team, which on Wednesday will meet Germany in South Africa.

This style calls for maximum ball possession; short, accurate passing; and constant probing and exploitation of any crack in the opponent’s defense.

But the authors note that the history of soccer has seen numerous strategies come and go, from extreme offensive play with 9 strikers (out of 11 players on a team) to extreme defensive play practiced at Inter Milan in the 1960s under coach Helenio Herrera — who, it happens, was the same nationality as Mr. Maradona, whose strategy as the Argentine coach at the World Cup competition in South Africa this year was all about offense.

Sports commentators, as well as financial-market commentators, may leave the impression that one strategy is superior to others. But time and again seemingly invincible teams have been undone by new strategies — just as Mr. Maradona’s Argentines were defeated Saturday by the German strategy of tight defense combined with explosive attacks.

In addition, there is another variable: a team’s ability to execute a given strategy. This is where economics comes back into play. Bayern Munich and FC Barcelona consistently rank among Europe’s best teams because they are among the richest clubs and can afford to hire players skillful enough to execute the strategy the coach has chosen.

The conclusion of Mr. Ebertz and Mr. Gronwald is that it would be a mistake to expect a team (or an investment fund) to be successful simply because it pursues a strategy that has been effective in the recent past.

“It has ever been so, that there have been extremely successful ways of playing, but that there have also always been new tactical developments,” they write. Therefore — and this will be bad news for bettors — “there is no way to say which strategy will succeed.”

Mr. Ebertz and Mr. Gronwald quote Otto Rehhagel, the German coach of the Greek team that won the European championship in 2004, despite critics who said the style of play was old-fashioned.

“The modern team is the one that wins,” Mr. Rehhagel said.


By JACK EWING
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