
Going for the Gold: The Economics of the Olympics - gwern
http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.30.2.201
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dmix
> Since that time, however, over half of all bids have come from this group,
> including applications by Istanbul, Bangkok, Havana, Doha, and Cape Town, as
> well as the successful bids from Beijing and Rio de Janiero

Well, it's a good thing Istanbul didn't get it... that would have been a
security disaster given recent events.

> The true final cost of the 1998 Nagano Winter Olympics will never be known,
> because the host committee ordered a portion of the event’s financial
> records to be burned (Jordan and Sullivan 1999).

What rational reason could there be to do this? Unless it's to hide something.

> From 1968 to 2012, every single Olympic Games ended up costing more than
> originally estimated. The median Games were 150 percent over the original
> budget, with the worst offenders—Montreal 1976 and Sarajevo 1984—exceeding
> initial estimates by more than ten-fold (Flyvbjerg and Stewart 2012).

I'm curious if estimates get adjusted for this reason (to be higher) that they
still end up exceeding the new estimates. It might be best to low-ball the
estimate but have good contingency plans that aren't made public.

One thing I've learned from making more money over the years is that financial
budgets have a way of becoming self-realizing, always growing to fill
capacity. It takes quite a bit of constraint and learning to address this -
something these Olympic host countries don't have the ability to do, as they
are always hosting it for the first time. They have no local experience to
draw from.

~~~
Someone
[https://en.m.wikipedia.org/wiki/2002_Winter_Olympic_bid_scan...](https://en.m.wikipedia.org/wiki/2002_Winter_Olympic_bid_scandal#Winning_bid):

 _" A Salt Lake Olympic Bid Committee member complained about competing with
the Japanese bid committee for the 1998 Olympic Winter Games: "We were giving
out saltwater taffy and cowboy hats, and they were giving out computers. IOC
members who came to inspect Nagano were put up in ritzy hotspring resorts,
where they washed down expensive sushi with sake poured by kimono-clad geisha.
They went home laden with souvenir gifts and expensive paintings." A senior
member of the Japanese bid committee, Sumikazu Yamaguchi, ordered that
accounting documents for the Nagano bid be burned because they "could cause
unpleasantness to [IOC members]." The Melbourne bid committee for the 1996
Summer Olympics discovered the quid pro quo expectations of IOC delegates when
they received requests from six African IOC delegates for new cars and sexual
favors from local brothels. They denied the requests and the 1996 Summer
Olympics went to Atlanta."_

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pasbesoin
I've reduced this problem to one personal choice: Boycott.

There's a bunch of cognitive overload I can now instead devote to something
else.

If they ever return from money to sportsmanship -- maybe also just parking the
thing back in Greece, permanently -- maybe I'll give it another look.

Sports are for doing. If you're watching, and spending, more than you're
doing, you're doing it wrong. You've gone from entertainment, to distraction
from and substitution for better things. IMHO.

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benmmurphy
its seems a bit like an agency problem. there is a lot of benefits from being
the person who 'wins' the olympics or having political power while
construction and planning for the olympics is going on. so it is not
surprising that lots of cities will aggressively bid for the olympics even if
it is not necessarily in the general interest. and this intense competition
makes it even worse for the winning city :( do you think cities bidding for
the olympics understand winners curse?

~~~
LeifCarrotson
The article mentions both aspects. Boston's retracted bid was spearheaded by
the construction and hospitality industries before being retracted after
public outcry. Autocratic regimes are more likely to subvert the overall good
and ignore or suppress this outcry for their own private good.

And as far as the winner's curse goes:

> it is possible to ascribe a portion of the economic failings of the Olympics
> to the “winner’s curse,” the result in auction theory that when parties are
> bidding on an asset of uncertain value (like rights to offshore oil leasing
> tracts), the winner will tend to be the bidder who is most prone to
> overestimating the value of the asset—which means that the winner is likely
> to be systematically disappointed (for an overview of the “winner’s curse,”
> see Thaler 1988).

Or see Wikipedia:
[https://en.wikipedia.org/wiki/Winner%27s_curse](https://en.wikipedia.org/wiki/Winner%27s_curse)

To state it differently, the winner of a contracting project which was awarded
to the lowest quote, assuming equal labor costs, is the one who most
underestimated its difficulty and scope creep. That helps me understand a few
projects I have been involved in.

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kogepathic
How about a warning that this is a PDF?

~~~
LeifCarrotson
The good news is it's just a text document, which appears to have been
generated in LaTeX, and it weighs in at 256 kB. That's less than most HTML
pages!

So if you clicked it on mobile, and your device didn't handle it gracefully
for some reason (are there still some which don't?), you didn't waste much
data.

