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The Third Place Game

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Listed:
  • Netanel Nissim
  • Aner Sela

Abstract

We study an elimination tournament with four contestants, each of whom has either a high value of winning (a strong player) or a low value of winning (a weak player) and these values are common knowledge. Each pairwise match is modeled as an all-pay auction. The winners of the first stage (semifinal) compete in the second stage (final) for the first prize, while the losers of the first stage compete for the third prize. We examine whether or not the game for the third prize is profitable for the designer who wishes to maximize the total effort of the players. We demonstrate that if the players are asymmetric and there are at least two strong players, then there is always a seeding of the players such that the third place game is not profitable. On the other hand, if there are at least two weak players, then there is always a seeding of the players such that the third place game is profitable.

Suggested Citation

  • Netanel Nissim & Aner Sela, 2020. "The Third Place Game," Journal of Sports Economics, , vol. 21(1), pages 64-86, January.
    • Handle: RePEc:sae:jospec:v:21:y:2020:i:1:p:64-86
    DOI: 10.1177/1527002519859415
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    Cited by:

    1. Sela, Aner, 2022. "Effort allocations in elimination tournaments," Economics Letters, Elsevier, vol. 211(C).
    2. Guajardo, Mario & Krumer, Alex, 2023. "Format and schedule proposals for a FIFA World Cup with 12 four-team groups," Discussion Papers 2023/2, Norwegian School of Economics, Department of Business and Management Science.

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    More about this item

    Keywords

    all-pay auctions; elimination tournaments; third place games;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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