Vienna Woods Law & Economics

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Basketball and the Rule of Law – By Asheesh Agarwal — March 16, 2025

Basketball and the Rule of Law – By Asheesh Agarwal

[Note: This post originally appeared at Law & Liberty on March 14, 2025]

In sports, as in life, it often does pay to break the rules. In baseball, the Houston *stros improperly used electronics to steal signs, won the World Series, and received little more than a gentle pat on the wrist. In football, Bill Belichick, the New England Patriots’ former coach, spied on opponents and deflated footballs on his way to multiple Super Bowl victories, paying small fines but retaining his trophies and tens of millions of dollars in salary. A parade of athletes, from Lance Armstrong and Barry Bonds to Manny Ramirez and Maria Sharapova, used banned substances for enormous personal profit, while depriving their rivals of the chance to compete fairly on the merits.

In some respects, however, basketball stands alone in its disregard for the rule of law. Basketball is the only sport that incentivizes teams to break the rules—and to get caught doing so. Basketball is also the only sport that allows teams to pause play as a means of eliminating an opponent’s advantage, rather like letting a litigant file an amended complaint during closing arguments. These dynamics slow the pace of play, disincentivize defense, and reduce fan enjoyment. As we approach March Madness and the start of the National Basketball Association’s playoff season, the game’s showrunners might consider revising their rules and, in turn, revitalizing the game.

According to NBA Rule Number 12, Fouls and Penalties, “A player shall not hold, push, charge into, [or] impede the progress of an opponent. … Contact that results in the re-routing of an opponent is a foul which must be called immediately.” For those hoopsters with a law degree, Rule 12(B)(1)(b) helpfully specifies that “contact initiated by the defensive player guarding a player with the ball is not legal.” In general, the penalty for routine fouls consists of the opportunity to shoot up to two free throws.

Unfortunately, this penalty structure gives teams many incentives to foul and get caught, strategically and repeatedly. For instance, teams often foul poor free throw shooters as a defensive strategy in hopes that they can regain possession with the other team scoring less than two points. Most famously, opponents employed a “Hack-a-Shaq” strategy against former Los Angeles Lakers’ star center Shaquille O’Neal to force him to the free throw line. Shaq’s lifetime free throw percentage was only 52.7 percent, much lower than his lifetime field goal percentage of 58.2 percent, so the expected value of fouling Shaq often exceeded the expected value of playing sound defense. In game 2 of the 2000 NBA finals against the Indiana Pacers, Shaq shot 39 free throws, missing 21. Must-see TV, right?

This “foul” incentive can come to dominate late-game situations. Particularly at the college level, which has a longer shot clock and poorer shooters than the NBA, the last few minutes of many games descend into unfathomable tedium as teams foul to close deficits or to prevent potential game-tying three-point shot attempts. Instead of frantic last-minute defensive efforts to steal the ball, or last-second long-range shot attempts to tie the game, fans see interminable free-throw shooting contests. Don’t blame the teams—the rules reward such strategies.

Basketball is the only major sport with such a misaligned penalty structure. In football, penalties punish the offending team by moving the ball closer to its goal line and away from its opponents’; occasionally a team might intentionally take a delay of game penalty for strategic reasons, to give its kickers more room or better angles, but the other team can decline the yardage. In baseball, a pitcher may intentionally walk a strong batter to limit the risk of an extra base hit, or to set up a double play, but this happens infrequently and is expressly acknowledged by the rules as a legitimate strategy. In hockey, a penalty causes the player to leave the ice for two to five minutes, an unambiguous disadvantage.

What’s in a rule? According to Oxford Languages, a rule is an explicit regulation or principle that governs conduct within a particular activity or sphere. If instead of governing conduct, however, the rule allows violators to gain an advantage by breaking it openly, does it remain a rule at all? Or does it transform into a guideline in which regulated parties evaluate whether and when to comply? For instance, if a rule prohibits street parking but the fine is less than the cost of a parking garage, or if the penalty for late payment of taxes is less than the interest one accrues by delaying remittance, does it make sense to think of the prohibition as a rule? On the old Andy Griffith Show, lovable town drunk Otis would regularly drink too much and then check himself into jail for a free night’s bed (and presumably breakfast). The rule, against public drunkenness, became a tool, a sword, rather than a bar. So it is with fouling.

We love watching and playing sports, in part, because sports create an environment in which human effort is channeled through a rule-bound framework that rewards excellence: athleticism, teamwork, strategy, and skill. The justice of the playing field, the victory of merit, the race to the swiftest, is part of its appeal. A system that rewards open rule breaking, however, undercuts the essence of sport itself.

Basketball also differs from other sports in that teams can call timeout while the ball is in play to eliminate the opposing team’s advantage. A point guard trapped in the corner? Time out. An inbounder can’t find an open teammate? Time out. Imagine if other sports allowed teams to pause play to eliminate a disadvantage. During Super Bowl LIX, the Philadelphia Eagles’ defensive line brought relentless pressure on Patrick Mahomes, the Kansas City Chiefs’ elusive quarterback. What if, instead of taking a sack or attempting another dazzling run or spectacular pass, Mahomes could simply pause the game: “Excuse me, Mr. Referee, I’d like to stop play now, as that rather large and fast gentleman is infringing on my personal space.” Or how about a runner caught in a rundown between the bases? In basketball, these sorts of time outs happen in virtually every game, degrading the value of vigorous defense and depriving the fans of possible turnovers and fast breaks.

Basketball’s misaligned rule structure is likely contributing to reduced fan interest. In the NBA, television ratings are down 28 percent on ESPN, while viewership has also fallen for men’s college basketball (21 percent) and women’s college basketball (18-24 percent). With many other options, viewers likely have less patience for the strategic monotony of foul-a-thons—who wants to watch paint dry when White Lotus is streaming?

To stem the tide, the NBA is considering a variety of drastic changes. For instance, the league has expressed interest in shortening games from 12-minute quarters to 10-minute quarters, a change that would reduce game times from 48 minutes to 40 minutes and could reduce total viewing time to under two hours. The league has also considered a gimmicky four-point line, farther out from the three-point line. Why not add a five-point line too?

Instead, basketball could address many of its issues by embracing the rule of law and a penalty structure that disincentivizes rule breaking. For example, a routine foul could result in the fouled team getting one free throw and the ball. More exotically, basketball could experiment with a hockey-style rule where a fouling player leaves the court for a possession, creating a 5 on 4 “basketball power play.” In either case, the penalty would remove the incentive to break the rules, consistent with basic legal concepts of deterrence and proportional punishment. Antitrust law imposes treble damages to discourage price-fixing; why can’t basketball award a free throw and the ball to discourage deliberate fouls?

As basketball fans know, foul-a-thons arguably serve one useful purpose: creating an opportunity for trailing teams to close the gap in the game’s waning minutes. Here’s where basketball could help itself by amending its rules to limit time outs. Rather than allow the offense to call a time out at will, the rules should allow time outs only in true dead-ball situations, such as immediately after a made basket or foul, rather than during play or when a team is trying to inbound the ball. This rule change would reward vigorous defense, lead to more turnovers, and create more late-game drama. Baseball recently changed its time out rules to expedite the game; basketball could do the same.

Finally, the game could review other incentives for proper alignment. For instance, should the game continue to reward a team with an extra point for making a shot from twenty-two feet away from the basket, only seven feet farther out than a free throw? Per Golden State Warriors’ big man Draymond Green, the game has become “very boring” because it now revolves around three pointers. The three-point shot was designed to reward a team for taking a shot far from the basket, a skill that in the past was perfected by a few specialized marksmen such as Reggie Miller, but that today is commonplace.

Imagine a world where the final minutes of a basketball game are filled with non-stop action, strategic brilliance, and edge-of-your-seat excitement. Rather than the monotonous rhythm of fouls, free throws, and time outs, a game’s closing minutes would see full-court presses, intense defense, and more turnovers. By embracing principles of the rule of law and by properly aligning penalties with incentives, the game of basketball would become better, faster, and more enjoyable, and an even truer test of skill and strategy.

In this respect, the game of basketball might benefit from lessons learned in those other courts. A few reforms could revitalize one of America’s great sports.

As AI Advances, U.S. Must Choose the Path of Regulation or Innovation – By Asheesh Agarwal — March 8, 2025

As AI Advances, U.S. Must Choose the Path of Regulation or Innovation – By Asheesh Agarwal

[Note: This post was originally published by the American Edge Project on March 7, 2025]

As the rise of powerful Chinese AI models, such as DeepSeek’s r1and Alibaba’s Qwen 2.5, have laid bare, U.S. policymakers must choose a pathway for artificial intelligence (AI). One path, littered with regulations and roadblocks, treats AI as a threat to manage rather than an opportunity to nourish. Down the other path, policymakers and the private sector partner together to promote innovation and maintain our global technological leadership.

The Road to Nowhere

As Vice President Vance recently explained to the AI Summit in Paris, “excessive regulation of the AI sector could kill a transformative industry just as it’s taking off.” The European Union’s (EU) AI Act, for instance, prohibits certain AI functions that the EU deems an “unacceptable risk” to citizens. The Act carries enormous fines for noncompliance, up to 35 million euros or seven percent of their global annual revenues. Canada’s Competition Bureau has cited this Act “as a model for Canada,” and even here at home, the Federal Trade Commission’s (FTC) former chair wants to continue the Biden administration’s AI policies, which required companies to pretest models before their release and which used antitrust law to limit AI investments.

The evidence, however, shows that excessive regulations can stifle innovation. Europe’s AI sector lags far behind the United States; from 2023 to 2024, more than $47 billion in investments flowed to U.S. generative AI firms, while European firms raised only $8.8 billion. In a recent letter, 150 European business leaders complained that the AI Act could damage Europe’s long-term competitiveness. Another official worried that American companies were outpacing their European rivals: “I’m not saying it’s good but in America you have a lot of AI and no regulation, in Europe you have no AI and a lot of regulation.”

Here at home, these types of policies would hamstring American innovators and cede leadership to Chinese companies. President Trump has called DeepSeek, an open-source tool developed by a Chinese company using less data and less sophisticated chips that many U.S. models, a “wake-up call” for America’s tech companies. Indeed, the evidence belies the need for heavy-handed regulations. In 2023 alone, nearly 900 new AI companies entered the market and venture capital soared to $67.2 billion, while U.S. AI patent filings surged 621 percent from 2018 to 2022. Earlier this month, large U.S. companies committed to investing hundreds of billions more into AI infrastructure and research.

Moreover, the FTC itself found no competitive problems in the AI sector. In a report issued in the Biden Administration’s waning days, the agency found that “AI technology is rapidly evolving” and that the sector’s evolution will determine whether competitive concerns arise in the future. The agency also found that small companies can benefit from contracts with large tech companies, such as by gaining access to critical training, testing, computing resources and optimized hardware.

The Path to Prosperity

To promote innovation, policymakers should continue to encourage light-touch AI regulation, ground antitrust enforcement in evidence of consumer harm, invest in critical AI inputs such as energy and talent, and collaborate with our allies to counter authoritarian threats.

Beyond these touchstones, the United States should continue to encourage the development and deployment of both open and closed-source AI models, both to promote competition and to safeguard our national security. In terms of competition, the FTC itself has explained that “open-weights models have the potential to drive innovation, reduce costs, increase consumer choice, and generally benefit the public – as has been seen with open-source software,” while Canadian regulators found that the “increasing availability of open-source AI technology and public cloud infrastructure makes AI development more accessible.”

In terms of national security, the United States must provide the world with alternatives to China’s models. For years, China has sought to leverage technology to supplant the United States as the world’s preeminent technological superpower and gain economic and national security superiority over the Western world. China seeks to achieve its goal, in part, by embedding its technology, and therefore its authoritarian values, into the global technological infrastructure, including Huawei’s telecommunications equipment and now DeepSeek’s open-source AI tools. The United States must develop and deploy both open- and closed-source models to ensure democratic principles shape AI’s future. Ceding this ground risks allowing China’s authoritarian vision to define global AI and perhaps to embed Chinese-built models with our allies.

In Paris, the Vice President warned against “paralyzing one of the most promising technologies we have seen in generations.” America has always prioritized innovation over regulation—and when it comes to AI, America should follow the same course.

Asheesh Agarwal is an advisor to the American Edge Project and an alumnus of both the Department of Justice and Federal Trade Commission.  See his mini-bio on the Contributors page.