The Efficiency of the NASCAR Reward System

Craig Depken and Dennis P. Wilson
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Dennis P. Wilson: University of Texas at Arlington

Journal of Sports Economics, 2004, vol. 5, issue 4, 371-386

Abstract: This article reports empirical tests of the hypotheses developed by Peter von Allmen regarding the inefficiency of a nonlinear reward system in NASCAR. Using season level data from 1949 through 2001, we find that there is less than a one-to-one relationship between the concentration of performance and the concentration of dollar rewards, offering support for von Allmen’s sabotage hypothesis. Granger causality tests indicate that performance-points concentration does not Granger cause winnings concentration, and vice versa. This detracts from von Allmen’s cost hypothesis, although not necessarily from his intuition regarding the hypothesis’s validity.

Keywords: tournament structure; autocorrelation; Granger causality; competitive balance (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:5:y:2004:i:4:p:371-386

DOI: 10.1177/1527002503260559

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