Every major American professional sport has its moment in the spotlight, captivating audiences across the nation. Baseball boasts the ‘Fall Classic’, the NFL takes over Thanksgiving, and an entire weekend is devoted to the Super Bowl. Christmas Day transforms into the NBA’s grand showcase, stretching from noon until midnight, although the NFL occasionally attempts to crash the party. When fans gather to watch titans like LeBron James and Kevin Durant clash on the court, the spotlight rarely shines on the referees. Yet, the game simply cannot function without them.
The establishment and enforcement of rules within sports often go unnoticed, despite their critical role in shaping the outcomes of games and championships—until, of course, a referee makes an eyebrow-raising call.
Consider the infamous incident in a 2010 World Cup knockout match, where English midfielder Frank Lampard unleashed a strike that struck the crossbar, seemingly crossing the goal line past German goalkeeper Manuel Neuer. Spectators were convinced it was a game-tying goal at 2-2, except for the referees. Real-time footage confirmed that Lampard’s shot had indeed crossed the line, yet the goal was disallowed. Germany subsequently triumphed 4-1, igniting a global debate about officiating in soccer and leading to the swift adoption of goal-line technology.
Fast forward nearly ten years, and the English Premier League rolled out Video Assistant Refereeing (VAR) with the noble intent of minimizing human error in officiating and enhancing fairness. However, in the six seasons since its debut, VAR has incited even more controversy than it has resolved. How can that be? Wouldn’t fans desire more accurate decisions?
Perhaps not, suggests Daisy Christodoulou, author of I Can’t Stop Thinking about VAR and a guest on the February 2025 EconTalk episode, Coase, the Rules of the Game, and the Costs of Perfection. In their discussion, Christodoulou and host Russ Roberts employ economic theory to explore how the pursuit of perfection can lead to dissatisfaction, the value of continuums over rigid categories, and how comparative judgment may enhance consistent rule-making that respects individual preferences.
Central to this discourse is the Coase theorem, which posits that in certain scenarios, individuals can resolve disputes involving externalities more efficiently than a governing authority. This is partly because striving for impeccably perfect rules that seek to eliminate externalities often overlooks the complexities of individual circumstances. Roberts argues that methods like VAR can complicate the already murky waters of officiating, creating needless disputes that could be resolved with a dash of common sense. “We all know what a goal is. We all know what a handball is… yet when we dive into these details, somehow it becomes more convoluted.” Christodoulou concurs, noting that VAR, intended to clarify refereeing decisions, has largely resulted in confusion and irritation. She asserts that VAR has imposed a top-down rulemaking structure onto a previously bottom-up process, resulting in a clash between accuracy and fan preferences.
There exists an inherent trade-off between the precision of officiating and the thrill of the game. Lengthy video reviews may yield the correct outcome, but they often sap the joy from moments of scoring.
Christodoulou likens this dilemma to the balance between consistency and common sense. By referencing the justice system, she argues that people often appreciate a certain degree of discretion in law enforcement and interpretation. However, this discretion can lead to inconsistencies, claims of bias, and possible injustices. In essence, navigating trade-offs is an inevitable challenge, and attempts to overcome them frequently result in the worst of both scenarios.
This predicament is precisely what has arisen with VAR: an overcomplication of rules, inconsistently applied.
Since the advent of VAR, the handball rule has ballooned from 11 words to a staggering 121 words, and yet what constitutes a handball can vary drastically, even within the same match. Christodoulou argues that the handball rule mistakenly categorizes a continuous variable as a categorical one. Categorical variables are mutually exclusive, whereas continuous variables exist on a spectrum. Many decisions referees make during matches fall into categorical categories: an incident is either a foul or it is not. The challenge arises when the distinction is not clear-cut. Describing what qualifies as a handball is, at times, nearly impossible in plain language. However, this does not mean it can’t be discerned. Christodoulou contends that this can be achieved through comparative judgment and tacit knowledge.
To illustrate this point, Christodoulou compares it to grading academic papers. It is significantly easier to determine which of two pieces is superior than to assess the quality of a single piece in isolation. Evaluations made in a vacuum can fluctuate wildly among different individuals and, crucially, within the same individual. Conversely, comparative assessments can be aggregated to create a quality distribution. According to Christodoulou, grading through comparative judgment fosters greater agreement and consistency than an arbitrary rubric.
“You encounter this paradox: what appears to be an incredibly subjective method of assessment is actually quite objective. Conversely, what seems to be a very objective measure—with its checklists and criteria—when analyzed statistically reveals a high level of subjectivity.”
In applying this insight to refereeing, technology could compile potential handball incidents. Subsequently, crowdsourcing could engage fans, players, and referees in determining which of two clips represents a clearer handball. Over time, this process would yield a distribution for evaluating handball incidents. Here, Christodoulou proposes that AI could be trained to recognize patterns from incidents classified as handballs, assisting referees during disputes. Referees could then evaluate whether the incident falls above or below an established threshold for handball.
Ultimately, there are no definitive solutions—only trade-offs. Perfect rules remain elusive. Attempts to enforce them from the top down yield vague rules that are inconsistently applied, leaving fans (and players) dissatisfied. Paradoxically, fostering goodwill towards referees might stem less from heightened oversight or efforts to override their judgment and more from embracing the value of common sense and tacit knowledge.
Kevin Lavery is a graduate student in the M.S. in Economics program at Georgetown University. He holds dual Bachelor of Science degrees in Economic Analysis and Political Science from Western Carolina University.
