Top-35 Rule and Coase Theorem

In law school you learn a bunch of theory that is never applicable or helpful in legal practice. However, I’ve found that at least one theory I learned in my first year property class is applicable to…of all things…NASCAR and particularly the Top-35 Rule. What theory am I talking about? The best, most fun, and craziest theory of them all…Coase Theorem!!!. Okay…so hear me out on this one:

Coase Theorem is a “law and economics” theory and was developed by…you guessed it…a guy named Coase (Ronald Coase). Without getting into a full bore explanation that would make you and me want to cry (and which would probably not be entirely accurate), the gist of his theory is that as long as property rights are well defined, it matters not how property is doled out because the party that is most able to reap the highest economic return on the property will end up with it in the long run.

Okay…so here’s my application of this theory to NASCAR and the Top-35 Rule. The Property we’re talking about is a guaranteed starting spot in a NASCAR Cup race. The Property rights have been well-defined by NASCAR and they are: (1) Any car in the Top-35 of Owner’s Points has a guaranteed starting spot in the race; (2) Cars not in the Top-35 must qualify for the race on speed alone, with exactly 8 spots dedicated to these cars; and (3) The most recent Cup champion not to make the field on speed and not in the Top-35 will start the race.

We see this theory proved out through many examples in NASCAR’s recent history.

-Bobby Ginn trades two Top-35 starting spots last year to DEI. It didn’t matter that Ginn had Top-35 positions and DEI (via Paul Menard) didn’t. All that mattered was the fact that DEI could make better use of the positions than Bobby Ginn…so DEI and Ginn bargained and both got what they wanted (DEI got two top-35 spots and Ginn got $)

-Roger Penske manipulates both the Top-35 rule and the Past Champion’s provisional rule to obtain a Top-35 spot for Sam Hornish Jr. (God bless him). It didn’t matter that Penske was not granted a Top-35 spot for the 77 at the beginning of this season…he bargained around the rule and secured a Top-35 spot for the 77. He was able to do this because he had the $$$$$/resources to hire a past-champion (Kurt Busch) and the $$$$$$$/resources to help the 77 maintain its position in the Top-35 (barely).

-Kyle Petty uses Texas Terry to get the 45 into races even though he doesn’t have a Top-35 spot in the points. Why? Again…$$$$$$$ and resources.

Of course, some of these examples are a bit watered down from the original thrust of the theorem because even at last year’s peak there were only like 48 regulars. You would see this theory at work much more profoundly if there were something like 65 teams trying to get into the race each week.

So basically Mr. Coase’s theory boils down to this (in relation to NASCAR): it doesn’t matter what rule NASCAR uses to determine who starts the races; in the end, the teams with the most money and that are best able to make use of a starting spot in the race will end up with a starting spot. So if NASCAR decided that the 43 cars whose drivers wore blue socks and ate the most chicken wings on Wednesday got to start the race, then Rick Hendrick, Jack Roush, Richard Childress and Joe Gibbs would be the world's largest consumers of blue socks and chicken wings, and by virtue of that, would be in the race each and every weekend.

RELATED ARTICLES from HOWSTUFFWORKS.COM

How Conspiracy Theories Work
Could salt water fuel cars?

• 3 Comments
• Leave a Comment