The decision whether to submit a bid for the Winter Olympics is a risk that many countries are unable to take. For many nations, the costs associated with bidding outweigh the benefits of being chosen to host. Beyond the cost, an important consideration is how national pride and the country's reputation will be affected by the IOC's bid eliminations and selections. These effects are an important consideration for politicians and public officials when deciding whether or not to submit a bid.
In 1994, there were four locations that submitted bids to serve as the host city by the IOC. The four were Lillehammer (Norway), Östersund (Sweden), Anchorage (USA) and Sofia (Bulgaria). Once host cities submit a bid, the IOC has three rounds, eliminating one location each round. The selection process occurred on September 15, 1988 and the final results can be found here.
To model the effect of the bidding process on the country's reputation to both the IOC and the international sport community (i.e., future consideration to host large events like the World Cup, Summer Olympics, etc), a decision tree model was designed to model the expected utility from each possible outcome. Positive values signify improved reputation & public sentiment while negative values signify diminished reputation and public sentiment. For example, an end utility of -50 after being eliminated from the first round in the bidding process illustrates negativity associated with failing to receive a bid, whether it is public opinion or future considerations regarding huge events. An end utility of 185 after being chosen to host illustrates increased nationalism and international reputation.
Choosing not to submit a bid would preserve the nation's reputation and would slightly increase the chance of getting to host a huge event in the future. For example, the Scandinavian countries had not hosted a Winter Olympics in a while which contributed to the probability of either Lillehammer or Östersund being selected for the 1994 games. When deciding whether or not to submit a bid, an important consideration is the likelihood of being chosen. Bidding when the possibility of elimination is high is fiscally irresponsible and showcases countries' flaws (which are often highlighted during the bidding process).
The values below are arbitrary and based on their relation to other values in the tree (being eliminated in the first round is slightly better than being eliminated in the third round where more money is spent by the government without being chosen, disliked more by citizens). Looking at the end utility values, it is evident that Norway had a lot to gain in nationalism and public sentiment if chosen as a host nation. Whether Lillehammer or a bigger city like Oslo should have been chosen is still up for debate and will be later discussed in future analyses.
