IDEAS home Printed from https://ideas.repec.org/a/sae/jospec/v13y2012i6p603-618.html
   My bibliography  Save this article

Does the Red Flag Rule Induce Risk Taking in Sprint Finishes? Moral Hazard Crashes in Cycling’s Grand Tours

Author

Listed:
  • Travis J. Lybbert
  • Troy C. Lybbert
  • Aaron Smith
  • Scott Warren

Abstract

Sprint finishes in professional cycling are fast, furious, and dangerous. A “red flag rule†(RFR) seeks to moderate the chaos of these finishes, but may induce moral hazard by removing the time penalty associated with crashing. To test for moral hazard, the authors use a 2005 rule change that moved the red flag from 1 km to 3 km from the finish. Data from Europe’s Grand Tours indicate that, after the rule change, both the incidence and the size of crashes nearly doubled in the 1–3 km from the finish zone. There was no such increase in crashing rates in the 3–5 km zone.

Suggested Citation

  • Travis J. Lybbert & Troy C. Lybbert & Aaron Smith & Scott Warren, 2012. "Does the Red Flag Rule Induce Risk Taking in Sprint Finishes? Moral Hazard Crashes in Cycling’s Grand Tours," Journal of Sports Economics, , vol. 13(6), pages 603-618, December.
    • Handle: RePEc:sae:jospec:v:13:y:2012:i:6:p:603-618
    DOI: 10.1177/1527002511412077
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1527002511412077
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1527002511412077?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bergemann, Dirk & Hege, Ulrich, 1998. "Venture capital financing, moral hazard, and learning," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 703-735, August.
    2. Robert H. Frank, 2005. "Positional Externalities Cause Large and Preventable Welfare Losses," American Economic Review, American Economic Association, vol. 95(2), pages 137-141, May.
    3. Jason Abrevaya, 2004. "Fit to be Tied," Journal of Sports Economics, , vol. 5(3), pages 292-306, August.
    4. Atkeson, Andrew, 1991. "International Lending with Moral Hazard and Risk of Repudiation," Econometrica, Econometric Society, vol. 59(4), pages 1069-1089, July.
    5. Berentsen, Aleksander, 2002. "The economics of doping," European Journal of Political Economy, Elsevier, vol. 18(1), pages 109-127, March.
    6. Isabelle Brocas & Juan D. Carrillo, 2004. "Do the “Three-Point Victory†and “Golden Goal†Rules Make Soccer More Exciting?," Journal of Sports Economics, , vol. 5(2), pages 169-185, May.
    7. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
    8. Neil Longley & Swaminathan Sankaran, 2007. "The Incentive Effects of Overtime Rules in Professional Hockey," Journal of Sports Economics, , vol. 8(5), pages 546-554, October.
    9. Kjetil K. Haugen, 2008. "Point Score Systems and Competitive Imbalance in Professional Soccer," Journal of Sports Economics, , vol. 9(2), pages 191-210, April.
    10. Benno Torgler, 2004. "?La Grande Boucle?: Determinants of Success at the Tour de France," CREMA Working Paper Series 2004-22, Center for Research in Economics, Management and the Arts (CREMA), revised May 2005.
    11. Steven Shavell, 1979. "On Moral Hazard and Insurance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(4), pages 541-562.
    12. Frank, Robert H, 1997. "The Frame of Reference as a Public Good," Economic Journal, Royal Economic Society, vol. 107(445), pages 1832-1847, November.
    13. Kevin Baldini & Mark T. Gillis & Matt E. Ryan, 2011. "Do Relief Pitching and Remaining Games Create Moral Hazard Problems in Major League Baseball?," Journal of Sports Economics, , vol. 12(6), pages 647-659, December.
    14. Wolfgang Maennig, 2002. "On the Economics of Doping and Corruption in International Sports," Journal of Sports Economics, , vol. 3(1), pages 61-89, February.
    15. Crandall, Robert W & Graham, John D, 1984. "Automobile Safety Regulation and Offsetting Behavior: Some New Empirical Estimates," American Economic Review, American Economic Association, vol. 74(2), pages 328-331, May.
    16. Alexander Dilger & Hannah Geyer, 2009. "The Dynamic of Bicycle Finals: A Theoretical and Empirical Analysis of Slipstreaming," Economic Analysis and Policy, Elsevier, vol. 39(3), pages 429-442, December.
    17. John Charles Bradbury & Douglas Drinen, 2006. "Research Notes: The Designated Hitter, Moral Hazard, and Hit Batters," Journal of Sports Economics, , vol. 7(3), pages 319-329, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jeffrey Cisyk & Pascal Courty, 2024. "An Economic Approach to Sports Injury Policies," Journal of Sports Economics, , vol. 25(3), pages 388-419, April.
    2. Pascal Courty & Jeffrey Cisyk, 2024. "Sports injuries and game stakes: Concussions in the National Football League," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 430-448, January.
    3. Brouwer, Thijs & Potters, Jan, 2019. "Friends for (almost) a day: Studying breakaways in cycling races," Journal of Economic Psychology, Elsevier, vol. 75(PB).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Julio del Corral & Juan Prieto-Rodríguez & Rob Simmons, 2010. "The Effect of Incentives on Sabotage: The Case of Spanish Football," Journal of Sports Economics, , vol. 11(3), pages 243-260, June.
    2. Rebeggiani, Luca & Tondani, David, 2006. "Organisational Forms in Professional Cycling - Efficiency Issues of the UCI Pro Tour," Hannover Economic Papers (HEP) dp-345, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Liam J.A. Lenten & Jan Libich & Petr Stehlík, 2013. "Policy Timing and Footballers' Incentives," Journal of Sports Economics, , vol. 14(6), pages 629-655, December.
    4. Till Treeck, 2014. "Did Inequality Cause The U.S. Financial Crisis?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 421-448, July.
    5. Robert S. Chirinko & Edward P. Harper, 1993. "Buckle up or slow down? New estimates of offsetting behavior and their implications for automobile safety regulation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 270-296.
    6. Jean Pinquet & Georges Dionne & Charles Vanasse & Mathieu Maurice, 2007. "Point-record incentives, asymmetric information and dynamic data," Working Papers hal-00243056, HAL.
    7. Wolfgang Maennig & Viktoria C. E. Schumann, 2022. "Prevention Effect of News Shocks in Anti-Doping Policies," Journal of Sports Economics, , vol. 23(4), pages 431-459, May.
    8. Kräkel, Matthias, 2005. "Doping in Contest-Like Situations," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 46, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    9. Müller, Daniel, 2013. "The Doping Threshold in Sport Contests," Working papers 2013/05, Faculty of Business and Economics - University of Basel.
    10. Berno Buechel & Eike Emrich & Stefanie Pohlkamp, 2016. "Nobody’s Innocent," Journal of Sports Economics, , vol. 17(8), pages 767-789, December.
    11. , & ,, 2012. "A principal-agent model of sequential testing," Theoretical Economics, Econometric Society, vol. 7(3), September.
    12. Lakdawalla, Darius & Zanjani, George, 2005. "Insurance, self-protection, and the economics of terrorism," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1891-1905, September.
    13. Idris Adjerid & Alessandro Acquisti & George Loewenstein, 2019. "Choice Architecture, Framing, and Cascaded Privacy Choices," Management Science, INFORMS, vol. 67(5), pages 2267-2290, May.
    14. McCannon, Bryan C., 2009. "Do less-violent technologies result in less violence? A theoretical investigation applied to the use of tasers by law enforcement," Economics Discussion Papers 2009-36, Kiel Institute for the World Economy (IfW Kiel).
    15. Lee Yoong Hon & Rasyad A. Parinduri, 2016. "Does the Three-Point Rule Make Soccer More Exciting? Evidence From a Regression Discontinuity Design," Journal of Sports Economics, , vol. 17(4), pages 377-395, May.
    16. Maria Arbatskaya & Hugo Mialon, 2010. "Multi-activity contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 43(1), pages 23-43, April.
    17. Jongick Jang & Hoon Hong & Chung Sik Yoo & Jonghyun Park, 2018. "Human Capital, Positional Good, or Social Network?: Exploring a Korean Model of Education," Working papers 2018rwp-121, Yonsei University, Yonsei Economics Research Institute.
    18. Tom Coupé & Olivier Gergaud, 2013. "Suspicious Blood and Performance in Professional Cycling," Journal of Sports Economics, , vol. 14(5), pages 546-559, October.
    19. Brad R. Humphreys & Jane Ruseski, 2014. "Adolescent Steroid Use and Intercollegiate Athletic Incentives," Working Papers 14-25, Department of Economics, West Virginia University.
    20. Cohen, Alma & Dehejia, Rajeev, 2004. "The Effect of Automobile Insurance and Accident Liability Laws on Traffic Fatalities," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 357-393, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jospec:v:13:y:2012:i:6:p:603-618. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.