Prize Structure and Performance: Evidence from NASCAR

Bernd Frick () and Brad Humphreys
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Bernd Frick: University of Paderborn, Postal: Alfred-Herrhausen-Straße 50, , 58448 Witten

No 2011-12, Working Papers from University of Alberta, Department of Economics

Abstract: The predictions that emerge from tournament theory have been tested in a number of sports-related settings. Since sporting events involving individuals (golf, tennis, running, auto racing) feature rank order tournaments with relatively large payoffs and easily observable outcomes, sports is a natural setting for such tests. In this paper, we test the predictions of tournament theory using a unique race-level data set from NASCAR. Most of the previous tests of tournament theory using NASCAR data have used either season level data or race level data from a few seasons. Our empirical work uses race level NASCAR data for 1,114 races over the period 1975-2009. Our results support the predictions of tournament theory: the larger the spread in prizes paid in the race, measured by the standard deviation of prizes paid or the interquartile range of prizes paid, the higher the average speed in the race. Our results account for the length of the track, the number of entrants, the number of caution flags, and unobservable year and week heterogeneity.

Keywords: NASCAR; tournament theory (search for similar items in EconPapers)
JEL-codes: J22 J33 L83 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2011-08-01
New Economics Papers: this item is included in nep-spo
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Prize Structure and Performance: Evidence from NASCAR (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2011_012

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