International Cricket Council’s decision to remove Steve Bucknor from the third test match at Perth has got a lot of criticism from the cricket experts and media. (All the developments after the Sydney Test Match are here; my view of the match is here).
The West Indies cricket board has raised objections over the move (as Bucknor is from WI) and so have number of players who call it a ‘bad precendent’. Their take is it has set a bad example and teams might be using this example to remove umpires who have given wrong decisions in their future matches.
This situation got me thinking and I can see quite a bit of similarity between the recent financial crisis and “Sydney” crisis.
Even in the recent crisis Fed was in a dilemma; if it didn’t cut the rates it would have invited huge criticism from various sections on account of slowing down of economy and if it cut rates it would invite the same from moral hazard brigade.
Similarly, if ICC did not take a decision it would have invited criticism from supporters of Indian team and when it took the decision it drew flak on the move.
ICC took the decision on 2 broad counts: one to pacify the situation as India had threatened the boycott of the tour and two, India contributes most to cricket’s revenues. Obviously, second reason is not the one which ICC can state formally but it is a well-known fact.
Now as long as it is the first reason it is fine, but it is the second reason it is more worrisome. The purists would say that a team cannot be larger than the game and hence Indian team’s request should not have been adhered to. Hence, it is a moral hazard in financial parlance.
I think the authorities have to share the blame for not acting fast enough. Like in the financial markets the authorities waited till all hell broke loose, similar is the case with cricket.
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India has always been uncomfortable with Steve Bucknor and he has given some horrendous decisions against India. ICC could have ensured that he is not umpiring in India’s matches. Prevention is better than cure.
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More than anything ICC has been ignoring the Aussie behavior for quite long. Bad behavior is bad by calling it “Aussie way of playing” you can’t pass it as good. This aussie stuff has been picked up by most teams and now any series is more popular for the behavior than cricket. ICC should have taken some tough decisions earlier on. I was actually expecting a far more worse thing than what happened at Sydney test like a full fledged brawl between the players etc. I hope we see some developments on this
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Umpiring standards are getting really bad as we move on. This is surprising given the increasing use and presence of technology. It is quite funny when you have an umpire say “not out” and TV screen at the stadium showing he was “out”. And there are many inconsistencies in their decisions. Sometimes, the third umpire is referred sometimes not. Sometimes the umpire gives out but the batsman is sent back on TV replay showing he wasn’t out and sometimes there is no action. Hightime for judicious mix of technology and humans. We can’t be inconsistent when stakes are so high. (Likewise the Central Banks should think beyond price stability otherwise each time we would see similar episodes)
In the end is it a case of Moral Hazard? I think yes. Like, financial markets never learn and keep coming out with fancy products (in the name of financial innovation) and end up asking for Fed’s help. Similarly, cricket teams might ask ICC to intervene in case things don’t go their way in certain matches.
But then moral hazard can be limited by doing things when things are going fine. ICC has got one opportunity to clean the game and I hope it does something fast. Otherwise, just like we see financial crisis get bigger, we will see worse cricket behavior ahead.
It is thrilling to see when somethings which appear so distinct are so similar. I also posted about the similarity between financial markets research and cricket here and here.
Update: Hariharan Narayanswamy has an interesting article on the same. However, I think in this case the person did not have the bat and was trying to be a bully. It was hight time that he was taught a lesson.
Mostly Economics 
January 11, 2008 at 3:32 pm
It’s a wonderful analogy. Just adding a few quick and independent thoughts of my own. My thoughts could be biased by the nature of work that I do. However they are as follows:
With India coming out with tit for tat appeal against Brad Hogg, next time anyone opens his mouth on the cricket field he will have to think twice, including the aussies. This effect will become more pronounced if Brad Hogg is indeed penalized (and if he isn’t then that will be another crisis of sorts).
This will not be good in my opinion as then the banter which goes on between players will completely stop and cricket will become more mundane and devoid of spice. The real test of mental toughness and character is when aussie is batting in India with crowds and players coming down on him hard and yet he scores a century and wins the match for Australia, and of course vice versa for an Indian player. This entertainment adds value increases participation of crowds that don’t fully understand cricket and generates interest in the game.
Similarly fancy financial products like derivatives add spice and zing in the markets. They have been the cause of a lot of financial crisis as well however their contribution in making markets more accessible and more worthy of taking risks may not be ignored.
What is important is perhaps the role media plays. How much a particular crisis maybe covered and in what way is important. If you are only broadcasting people burning flags and people who don’t know first thing about sportsmanship, leave alone cricket expressing an opinion to call the team back and shouting slogans then it will lead to a bitter and negative public opinion.
Similarly those who are monitoring risk, namely the credit rating agencies should be more accurate and precise in expressing their opinion on a particular financial product. A part of sub prime was due to incorrect rating classification of the tranches by ignoring the third party risks.
Moderation is necessary in all walks of life including finance and sports. The aussies should know this and know when to stop the banter from becoming serious. The Indians should concentrate on the game and fight it out against a better team. The markets should understand this and be careful in taking unidentified risks (and most of the times risk is not properly identified or classified). The regulators should understand this and allow market liquidity and not strangle financial innovations. All in all the correct identification and classification of risk is paramount.
April 23, 2010 at 5:08 pm
[…] also recall my earlier post comparing Sydney Cricket Test Match between India-Australia and sub-prime crisis as well. You know […]
May 6, 2010 at 12:03 am
International Cricket Council’s decision to remove Steve Bucknor from the third test match at Perth has got a lot of criticism from the cricket experts and media.
May 6, 2010 at 12:04 am
This will not be good in my opinion as then the banter which goes on between players will completely stop and cricket will become more mundane and devoid of spice.