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This is Scientific Americans, 60-second science. I'm Steve Merski. Got a minute?

The average cost overruns since 1976 for the Summer Olympics is 252%.

Smith College economist Andrew Zimbolist who specializes in sports economics.

So on average, if you bid $5 billion, you're going to end up spending somewhere in the

neighborhood of 17.5. Zimbler spoke February 5th at the Brighino Baseball Clubhouse in Manhattan

about issues he addresses in his new book, Circus Maximus, the economic gamble behind hosting

the Olympics in the World Cup. I think that the countries that have hosted those events, with two exceptions,

Los Angeles in 1984 and Barcelona in 1992, have not benefited economically, and some of them

have been significantly hurt. Boston hopes to host the 2024 Summer Olympics. Zimbler's

thinks that the city is probably better off losing their bid.

Both in the case of the World Cup and the Olympics, there's a monopolist seller of the

rights to host the games. And what they do is basically they orchestrate an international

competition. That process where you have one seller and multiple competitors is one

that leads to something that economists call

a winner's curse. Most of the bidders will agree with each other more or less that it makes

sense to spend only so much on the games, and there will be one bidder that's an outlier.

So the one that is the outlier and bids the most is the one that ends up winning.

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