With the ICC Champions Trophy entering the last-four stage, and Australia winning against Pakistan after a last-ball thriller – I’m running a high cricket fever! While growing up in my country, like every other kid my age, my dream was to become a cricketer (like Wasim Akram or Brian Lara), but as time progressed, and after the school cricket coach failed to realize my immense cricketing talents, I realized that I was better at another sport called Economics! Cricketers are “like derivative traders or rock musicians or authors. They are a small group of people who have an exceptional chosen talent”
Edward Lazear and Sherwin Rosen, who did an in-depth analysis of tournament theory, show how small differences in abilities (or luck) can result in a large difference in players’ pay-check. “A salesman who can sell 10% more than his peers in a company is likely to get paid 10% more. On the other hand, a batsman with a 10% faster-than-average response to a ball traveling towards his throat at 100 miles per hour is likely to end up earning 100 times more than the average cricketer.” Complete article here.
A cricketer cannot make his mark at the highest level unless he is selected in the national team, unlike football where playing in the EPL or La Liga (or the LA Galaxy for some!) might be the ultimate goal of some, or a Canadian hockey player might as well get a chance to be drafted in the NHL if not Team Canada, or a Japanese batter in the MLB etc. There are a whole host of choices in these team sports (in terms of monetary gains), but not in cricket. Yes, we now have the Indian Premier League (IPL), but that is an event which is wrapped up within 6 weeks in a given year, and there are stark intra-team differences in the salaries paid to players within the IPL – as most of it goes to the players who have already been playing for their respective national sides for quite some while. Playing for English or an Australian country, might help a cricketer earn more than what he earns while playing for his national side, but the difference in remuneration isn’t much when compared to other team sports (and English counties have a cap on selection of overseas players). So in the cricketing labor market, there is only one buyer of your talent, and that is the National team selection committee – a situation we would like to call Monopsony. But this is what makes cricket interesting – you do everything for the love of the sport, even if that entails having a no-result after a five-day test match!