Sequential round-robin tournaments with multiple prizes

Christoph Laica, Arne Lauber and Marco Sahm

Games and Economic Behavior, 2021, vol. 129, issue C, 421-448

Abstract: We examine the fairness and intensity of sequential round-robin tournaments with multiple prizes and heterogeneous players. A tournament is called fair if the winning probabilities in each match depend only on the players' characteristics but not on the sequence of matches. We show that tournaments with three players will be fair if and only if the second prize is valued half of the first prize. The optimal prize structure may, however, be subject to a trade-off between fairness and intensity (measured by the players' expected aggregate effort). By contrast, there is no prize structure for which tournaments with more than three players will be fair if the sequence of matches is exogenously fixed. Our analysis suggests that many tournaments of major sporting events are inherently unfair.

Keywords: Round-robin tournament; Multiple prizes; Fairness; Intensity; Tullock contest; All-pay auction (search for similar items in EconPapers)
JEL-codes: C72 D72 Z20 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:129:y:2021:i:c:p:421-448

DOI: 10.1016/j.geb.2021.06.012

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