Economics of Doping

Running head: DOPING IN CYCLING

25 June 2014

Utrecht School of Economics

The Economics of Doping: policy advices to create a level-playing field in professional cycling.

Authors:

Danilo Fattorini (3790215)

Orkhan Hajizada (3773663)

Supervisors:

Drs. Erwin van Sas (USE)

Dr. Tineke Lambooy (RGL)

Group Supervisor:

Drs. Erwin van Sas

Table of Contents

Abstract3

Introduction4

1. Institutional Framework7

1.1. Embeddedness7

1.2. Institutional Environment9

1.2.1. Formal Institutions9

1.2.2. Informal institution – the doping market112

1.3. Governance14

1.4. Resource Allocation and Employment16

2. Decision-making process16

2.1. Prize money and Doping17

2.2. Health and Doping22

2.3. Size of Punishment and Probability of Detection 23

2.3.1. Doping game: introduction26

2.3.2. Theoretical example using real numbers 30

2.4. Number of participants and Doping 34

2.5. Conclusion 37

3. Policy advices38

3.1. Efficiency Comparison 38

3.2. Application of Criminal Law 41

Conclusion42

Bibliography44

Appendix A: Interview with Filippo Simeoni49

Appendix B: Interview with Axel Dekker55

Abstract

Sports victories are often strived to at the cost of sportsmen’s integrity, reputation, health, security, or even life. The tendency to use performance-enhancing drugs is shaped by factors characterizing the institutional framework. In particular, the prize money, health costs, severity and frequency of punishment, and number of participants are expected to play a crucial role in the decision making process of an athlete concerning doping, therefore their significance will be shown empirically. This will lead to the designing of the policy necessary to create a level playing field in professional cycling. Turns out that a mix of increased controls, review of the list of prohibited substances, and application of criminal law in doping cases can help reaching such goal.

Introduction Sports victories are often strived to at...