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Economics shoots … and scores!

Imagine Steve Jobs saying the iPhone is useless or Bill Gates recommending that Microsoft Office be thrown out the window.
Nanjing Night Net

Such a bizarre situation exists in the world’s most popular sport, association football (or soccer). And those who saw the nerve-wrecking A-League grand final clash between Sydney FC and Melbourne Victory on Sunday probably sensed that the problem at hand is the penalty shoot-out.

The parallels between the economy and sport are stronger than they seem, and economic research can be useful in both arenas by identifying “welfare-improving” rules and policies.

In 2006, FIFA’s then president, Sepp Blatter, said: “Football World Cup, it is a passion, and when the match goes into extra time, it’s a drama. But when it comes to penalty kicks, it’s a tragedy.”

Blatter’s statement followed the 2006 World Cup final, which featured arch-rivals Italy and France and was decided by a penalty shoot-out. His statement was motivated by the large number of important matches decided in this cruel lottery.

What’s the problem? Blatter’s primary issue was not just the randomness of the shoot-out but that it doesn’t provide a team contest. It also puts extreme pressure on individual penalty takers, who may suffer major psychological trauma if they miss. One may recall the agony and tears of players such as England’s David Beckham, France’s David Trezeguet, Chelsea’s John Terry and, most recently, Melbourne Victory’s Carl Valeri and Marco Rojas, who missed the penalty kicks in Sunday’s grand final.

FIFA’s efforts to reduce the reliance on penalty shoot-outs resulted in adopting the so-called “golden goal” between 1993 and 2002, which meant “sudden death” for the team that first conceded a goal in extra time. The rule tried to ensure that there was more attacking play and thus fewer matches decided in a shoot-out.

The fiasco of this rule did not surprise economists, because they pay attention to the effects of various policies on incentives of economic subjects. It was clear to them that the golden goal not only increased the “reward” for scoring a goal – and therefore incentives for players to attack in extra time – but it also increased the “punishment” for conceding a goal – and therefore incentives to defend. As it turned out, the latter effect was stronger due to a phenomenon known as “loss aversion”, a theory for which Daniel Kahneman and Amos Tversky received the Nobel prize in economics in 2002. When it became apparent that the golden goal was counterproductive and led to fewer goals in extra time, FIFA abandoned it. How can economics help?

Are there alternatives to the penalty shoot-out that would eliminate the above shortcomings and alleviate the football tragedy? This is where economic research can help, by answering the following question: what would happen if we swapped the extra time and penalty shoot-out around? If, after a tie in regulation time (90 minutes), the shoot-out first took place, and only then did the 30-minute extra time follow? Under this new sequencing the team that scored the most goals in extra time would win – regardless of the outcome of the preceding shoot-out. Only in the event that the extra time ended in a draw would the shoot-out result become relevant and determine the winner of the game.

The positive psychological effects of this change are obvious. The team losing the shoot-out would have an opportunity to sway the match in its favour in the subsequent extra time. If it failed, it would be perceived as a failure of the team, not the individual who missed the 12-yard kick. This would naturally reduce their stress and stigmatisation.

Other effects of the proposed rule change are quantified in my study (with colleagues Liam Lenten from La Trobe University and Petr Stehl??k from University of West Bohemia) published in the Journal of Sports Economics. Our econometric analysis of a large number of football matches shows the proposed move of penalties before extra time would strongly encourage attacking play and increase scoring in extra time. According to our estimates, in competitions such as the World Cup or the European Champions League final, the rule would increase the likelihood of a goal in extra time by 45 to 60 per cent. It would therefore reduce the proportion of tedious games with scoreless extra time by half, from 50 to 25 per cent. It’s because one team would always have an incentive to attack – unlike under the status quo, whereby both teams often defend and wait for the shoot-out.

Our study shows the exact boost in extra-time scoring would depend on many factors, such as the number of goals in regulation time, tournament round, home-ground advantage and relative strength of the teams (which we measure by bookmakers’ odds). Our regression models suggest, for example, that the probability of a goal being scored in extra-time of a World Cup quarterfinal, between two equally favoured opponents tied nil all after regulation time, would increase from the current 35.2 to 61.9 per cent. If this same type of match finished one all after the regulation 90 minutes, the scoring probability would increase from 46 to 72 per cent under the new rule.

Therefore, we hope that, after the successful launch of the goal-line technology and promising trials of video-refereeing, FIFA officials decide to test other football innovations, including the proposed swap of extra time and penalties. It would allow economic research to prevent many future soccer and personal tragedies.

Dr Jan Libich is a senior lecturer in macroeconomics at La Trobe University.

This story Administrator ready to work first appeared on Nanjing Night Net.

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Scoping new markets

Ambition: Throat Scope founder Jennifer Holland in Newcastle. Picture: Marina Neil
Nanjing Night Net

You are the first Australian female to win a silver gong at the US-based Edison awards – honouring excellence in product development – for Throat Scope. What does the win mean to you?

It was an honour to win an Edison Award in New York. The award attracts some of the biggest companies in the world, like 3M and Phillips. To be recognised at this level was an amazing achievement for us.

You invented Throat Scope in 2009 after taking your child to the doctor’s and he was in pain during a mouth examination. How has the potential for the use of your product grown since then?

I designed Throat Scope to replace the penlight and wooden tongue depressor. Doctors, dentists, paediatricians, speech pathologists and paramedics now use Throat Scope. Throat Scope makes it possible to check for sore throats, sore teeth, and mouth ulcers at home. We also want to shine light on the importance of monthly self Oral Health Checks. We’re on a mission to educate the world on the early signs of Oral Cancer. Self-examination will save lives.

Your first brush with success was going on Channel 10’s Shark Tank program and landing a financial backer in tech start up multimillionaire Steve Baxter. Is he still invested in your company?

Steve has played a large part in the Throat Scope journey. His advice is invaluable. He is still an investor in Throat Scope.

Since your appearance on Shark Tank, what have been the biggest coups for your company?

In 17 months, we’ve secured 12 distributors across 146 countries. Team Medical Supplies is one of our largest deals to date, marketing and distributing Throat Scope in Australia. We’ve set up a new warehouse in Ohio in the USA, so we can ship direct to the US. We have three new US distributors and that number is growing.

How has the focus of your business changed since its inception and are there any new markets you envisage for Throat Scope?

Throat Scope provides medical professionals with an Easy, Fast and Accurate view of the mouth, throat, teeth, gums and soft tissue. Now we want to educate everyone about the benefits of at-home, monthly oral health self-checks. If a mole changes colour or shape we know to see a doctor. The early signs of oral cancer are also simple to detect but nobody knows what to look for. Throat Scope is partnering worldwide with Oral Cancer Foundations to educate everyone on the early signs.

What does an average day entail for you?

Most nights I have one or two calls to the US. I start my morning about 4:30am to get some work in before the children wake and also to coincide with US hours. I jump on the treadmill to run for 20 minutes and read emails. When the children wake, I’m in mum mode, getting breakfast, making lunches, dressing them, last minute homework, bags packed and then school drop off for three of my four children. With my fourth child in tow I head into the office for the day and leave about 2:55pm to do school pick up. I’m with the children in the afternoon, taxiing everyone to after school sports and dance. Then its homework, dinner, bath, books, bed and back to work for another couple of hours. My life is crazy but somehow it works. I love Sunday; I switch off and spend quality time with my family.

What are your current business goals?

The goal for Throat Scope and Holland Healthcare is to invent and develop revolutionary medical devices for the healthcare and home market. In 5 years our business will be on par with some of the leading global medical device companies.

What other medical devices are you working on?

We’ll soon be launching the Throat Scope App for parents and healthcare professionals. We’re also working on two new medical devices due out in 2018.

What drives you?

My motivation and drive come from my children. I want them to understand the importance of hard work, persistence and above all I want them to believe in themselves and have the confidence and courage to follow their dreams.

What is the biggest challenge to your business?

Challenges are part of growing, building and learning in business. A challenge for us now is the US company set up; finding the right staff, setting up the warehouse and office to run efficiently, and the intercompany transactions between home and the US.

What is the best part?

Definitely donating Throat Scope to doctors overseas who complete aid work in third world countries. I hope to one day go over and experience this first hand.

You have four young children and a hubby who is away a lot for work. What are your survival tools?

Becoming a mother during my start-up journey gave me all the skills, patience and perseverance I needed to succeed as an entrepreneur. Let’s face it; negotiating with a sick toddler at 3:00am is tough. If you survive that you can do anything.

Jennifer Holland

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Kantarovski survives Jets cleanout

Kantarovski survives Jets cleanout LAST MAN STANDING: Ben Kantarovski has been offered a one-year contract extension at the Jets. Picture: Jonathan Carroll
Nanjing Night Net

SCHOLARSHIP OFFER: Kristian Brymora

OUT: Andrew Hoole

OUT: Daniel Mullen

OUT: Mateo Poljak

OUT: Ma Leilei

OFF-FIELD OPTION: Labinot Haliti

OUT: Morten Nordstrand

MARINERS MOVE: Ben Kennedy

OUT: Tomislav Arcaba

OUT: Harry Sawyer

OUT: Joel Allwright

TweetFacebook The cleanout means the Jets have 17 contracted players, plus Kantarovski if he accepts the offer of a one-year contract extension, leaving five vacancies for new players.

Kantarovski’s wage lies outside the salary cap under the A-League’s concession for club loyalty.

The Jets have signed Mariners striker Roy O’Donovan, Melbourne Victory defender Daniel Georgevski, who won the Joe Marston Medal as player of the match in Sunday’s grand final, and youngsters Kosta Petratos and Mario Shabow for next season.

It is understood club management have drawn up a list of potential recruits which includes 31-year-old Socceroo Mark Milligan, who is halfway through a two-year contract at Baniyas SC in the United Arab Emirates, and former Jets forward Nathan Burns.

Also mentioned as possible targetsare 28-year-old Wanderers midfielder Mitch Nichols, Victory’s 31-year-old Spanishcentre back Alan Baro, Adelaide midfielder Marcelo Carrusca and former Wellington Phoenix keeper Glenn Moss.

Meanwhile, Queensland winger Joe Champness, one of two youth players the Jets sent to Portugal this year to develop their games, has earned a trial with Brighton and Hove Albion’s under-23s.Brighton won promotion from the English Championship to the Premier League last month.

Champness, a former Roar youth player, has not played for the Jets but signed an 18-month scholarship deal with the club in January before joining Portuguese club Academica on loan with Antonee Burke.

In other news, Spanish coach Guillermo Amor has left Adelaide after the Reds finished ninth this season.

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Whatever suits in battle to dress up

FASHION DARTBOARD: Statistics suggest that when it comes to selecting a suit it’s all in the eye of the beholder.SIMON WALKER: That’s Life archive
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Buying a suit for a pressing social engagement is a fashion crisis we all face at some stage of life. Usually the last minute.

Generally the experience is graphic, so in an effort to encapsulate, and indeed pixelate, the factors at play, I’ve come up with a graph (see right).

You’ll notice a slight gender bias, and that the criteria are vague and the percentages don’t add up. Welcome to fashion. Invert to to your needs as we dive deep into the data.

To put you in the picture, we’d been invited to a wedding weeks ago and we/I obviously needed some new clothes.

To quote the treasurer, “better days ahead”.The oldfallback of recycling what’s in the wardrobe, yet again, had been rejected. We/I needed to regenerate fashionistically. But why rush into it? Cue the last minute.

So we’re fashion in the field, hitting the change rooms like Australia’s Next Top Model, not. Clothes of various ill-fitting fabric, texture, length and style are being flungat pace in the face. The Met ball has nothing on some of the garb beingparaded.

Legs aren’t long enough, cuffs aren’t peaking out, shoulders are too puffy and eyes are getting that way too.

One of them’son the mirror checking the crotch, the other’s on the partner who has a kind of “over it” look on theface.

There’s a lot of intel to take in. The lighting’s poor. The music’s loud. The sales assistant has stopped asking my opinion and is communicating directly to the partner. And we’ve only just got here.

It feels likeI am being accessorised, and I have to say, it’s dehumanising. “Now you see what we go through!!!” exclaims the partner.

In that moment I am able to distil the four major ingredients that influencea man when it comes to selecting a suit. And you’ll see that none of them really count until you get to the last one.

Starting in descending order of importance, colour.

Worth 10 per cent of worry afterRobbie O gave us mustard yellow. Then there’s undertaker black, accountant grey and poo brown. Say no more. That is until you discover that the new black this year is blue.

Which is how the ego feels as I don a flecked and textured borderline cobalt number, copping in the process an observation from sassy second shop assistant that this style is really “common”.

I think he meant “popular”, but itcame across as aninsensitive thing to say, particularly to the second shop assistant who thought I wasabout to pull out of the sale.

It was touch and go, but we are now up tothe third most important point on the graph –the suit nearly fits.

Definitely worth another 10 per cent of fretting, particularly after three hours of squeezing into and out of all manner of neck-choking, gut-pinching, derma-braising combos.

Which gets us to the second most important thing,timing. The wedding is basically tomorrow and the shops are nearly shut.This is definitely worth worrying about unless you want to turn up to the ceremony nude.

Which heraldsthe ultimate factor that undoes all other considerations – does the partner like it?

Hard to tell as theyslump in the corner. But with one last effort thethumb comes up. We have a winner –my credit card company. Good debt or bad debt? Let the wedding snaps decide.

In the meantime I’m dressing this up as a graphic relief.

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