La Copa Libertadores Shows Why People Are Still Not Rational
Economists… we always get it wrong.
I’m an economist from the University of Buenos Aires. As economists, we are taught to believe that individuals act to maximize utility, to gain the highest level of satisfaction from their economic decisions. However, this principle seldom holds true in the real world. The recent events surrounding the Copa Libertadores final—Latin America's equivalent of the Champions League—once again challenged the bedrock of economic theory.
Boca Juniors, the team I ardently support, made it to the final of this continental tournament after a five-year hiatus. The last final, which we lost to our arch-rivals River Plate, was a bitter pill to swallow. Despite Argentina’s economic turmoil—with salaries at a multi-decade low, poverty nearing 50%, projected annual inflation surpassing 300%, and central bank interest rates at a staggering 133%—approximately 150,000 fans traveled to Rio de Janeiro. This level of commitment was similarly seen last December when thousands flew to Qatar, one of the most expensive countries, to support Lionel Messi’s team in the World Cup.
As an economist, you're wired to think in terms of rationality, to assume people won't engage in actions that harm their interests. Yet, time and again, reality contradicts this belief. Take, for example, a bright young man who used his hard-earned scholarships to fund a trip to Rio for himself and his father. Or consider the fan who sold his PlayStation, and the father who parted with the motorcycle he used for work. Furthermore, there were those who embarked on a 2,600km drive, unable to afford air travel.
Here’s some footage of the day of the match, getting off the subway:
In the days leading up to the final, Rio's streets witnessed unrest, with the ‘barra bravas’ of Fluminense hunting down Boca fans, raising concerns about the game being played behind closed doors. This unsavory backdrop only highlights the extremes fans went to: selling assets, incurring debt, and venturing into a hostile environment—actions that seem inexplicable.
But let's circle back to the crux of the matter: economists don’t get it.
There's no apparent utility in being a Boca fan—or any club's fan. The rational mind balks at the thought. However, studies in behavioral economics, such as those by Dr. Jane L. Risen, illustrate that individuals often prioritize emotional satisfaction over financial gain. Similarly, Cass R. Sunstein and Richard H. Thaler's 'nudge theory' suggests that social and environmental cues significantly influence our decisions, even leading us to acts that defy conventional economic wisdom.
While I personally wouldn't sell my computer or solicit funds from loved ones for a football match, I can't dismiss the allure. There's something profoundly human about finding joy outside monetary or utilitarian gain. How many things truly make us happy? The ecstatic triumph of one's team can eclipse numerous economic theories. In a world obsessed with utility and profit, the irrational elation of sports fandom is a testament to our complex and often paradoxical nature.
This is more than an economic conundrum; it's a reflection of our deeply rooted passions. The utility derived from such experiences isn't quantifiable in the traditional sense but is undoubtedly real.
As I reflect on the past few days, I'm reminded that the value of experience can defy the rigidity of economic models. In a time of financial despair, the unifying force of football and the intangible joy it brings is, perhaps, the ultimate anomaly in a world governed by numbers and logic.