Robust Tournaments

Mikhail Drugov and Dmitry Ryvkin

Papers from arXiv.org

Abstract: We characterize robust tournament design---the prize scheme that maximizes the lowest equilibrium effort in a rank-order tournament where the distribution of noise is unknown, except for an upper bound, $\bar{H}$, on its Shannon entropy. The robust tournament awards positive prizes to all ranks except the last, with a distinct top prize. Robust prizes spread marginal incentives as evenly as possible across performance quantiles, minimizing the Kullback--Leibler divergence from the uniform distribution to the induced distribution of performance cutoffs. Asymptotically, robust prizes follow the harmonic number sequence, while the worst-case distribution of noise converges to an exponential distribution with rate $e^{1-\bar{H}}$. The prize scheme is highly unequal, especially in small tournaments, but becomes more equitable as the number of agents grows, with the Gini coefficient approaching $1/2$. In the large tournament model, logarithmic prizes and an exponential worst-case distribution also arise under a bound on expected noise above the lower endpoint of its support, and more generally under bounds on a class of means of the quantile hazard.

Date: 2025-07, Revised 2026-11
New Economics Papers: this item is included in nep-des, nep-mac, nep-mic and nep-spo
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