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Optimal seedings in elimination tournaments

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Author Info

  • Christian Groh

    ()

  • Benny Moldovanu

    ()

  • Aner Sela

    ()

  • Uwe Sunde

    ()

Abstract

We study an elimination tournament with heterogenous contestants whose ability is common-knowledge. Each pair-wise match is modeled as an all-pay auction where the winner gets the right to compete at the next round. Equilibrium efforts are in mixed strategies, yielding rather complex play dynamics: the endogenous win probabilities in each match depend on the outcome of other matches through the identity of the expected opponent in the next round. The designer can seed the competitors according to their ranks. For tournaments with four players we find optimal seedings with respect to three different criteria: 1) maximization of total effort in the tournament; 2) maximization of the probability of a final among the two top ranked teams; 3) maximization of the win probability for the top player. In addition, we find the seedings ensuring that higher ranked players have a higher probability to win the tournament. Finally, we compare the theoretical predictions with data from NCAA basketball tournaments.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s00199-008-0356-6
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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 49 (2012)
Issue (Month): 1 (January)
Pages: 59-80

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Handle: RePEc:spr:joecth:v:49:y:2012:i:1:p:59-80

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Related research

Keywords: Elimination tournaments; Seedings; All-pay auctions; D72; D82; D44;

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References

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  1. Baye, M. & Kovenock, D. & Vries, C. de, 1990. "The All-Pay Auction with Complete Information," Discussion Paper 1990-51, Tilburg University, Center for Economic Research.
  2. Sherwin Rosen, 1985. "Prizes and Incentives in Elimination Tournaments," NBER Working Papers 1668, National Bureau of Economic Research, Inc.
  3. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  4. Konrad, Kai A., 2003. "Bidding in hierarchies," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-27, Social Science Research Center Berlin (WZB).
  5. Klumpp, Tilman & Polborn, Mattias K., 2006. "Primaries and the New Hampshire Effect," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1073-1114, August.
  6. Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, vol. 69(3), pages 435-450, September.
  7. Klaassen, F.J.G.M. & Magnus, J.R., 2001. "Forecasting the Winner of a Tennis Match," Discussion Paper 2001-38, Tilburg University, Center for Economic Research.
  8. Gradstein, Mark & Konrad, Kai A, 1999. "Orchestrating Rent Seeking Contests," Economic Journal, Royal Economic Society, vol. 109(458), pages 536-45, October.
  9. Amegashie, J Atsu, 1999. " The Design of Rent-Seeking Competitions: Committees, Preliminary and Final Contests," Public Choice, Springer, vol. 99(1-2), pages 63-76, April.
  10. Clark, Derek J & Riis, Christian, 1998. "Competition over More Than One Prize," American Economic Review, American Economic Association, vol. 88(1), pages 276-89, March.
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Citations

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Cited by:
  1. Kräkel, Matthias, 2005. "Emotions and the Optimality of Unfair Tournaments," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 45, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. J. Atsu Amegashie, 2005. "Asymmetry And Collusion In Infinitely Repeated Contests," Working Papers 0509, University of Guelph, Department of Economics.
  3. Münster, Johannes, 2006. "Contests with Investment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 120, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. J. Atsu Amegashie, 2005. "Information Transmission In Elimination Contests," Working Papers 0511, University of Guelph, Department of Economics.
  5. Baye, Michael R. & Kovenock, Dan & Vries, Casper G. de, 2009. "Contests with rank-order spillovers," Discussion Papers, Research Unit: Market Processes and Governance SP II 2009-09, Social Science Research Center Berlin (WZB).
  6. Kräkel, Matthias, 2004. "Emotions and Incentives," IZA Discussion Papers 1270, Institute for the Study of Labor (IZA).
  7. Frederik Schmidt, 2008. "The Stability of Dynamic Contests with Asymmetric and Endogenous Prizes," Economics Bulletin, AccessEcon, vol. 3(4), pages 1-9.
  8. J. Atsu Amegashie, 2005. "Signaling In A Dynamic Contest With Boundedly Rational Players," Working Papers 0510, University of Guelph, Department of Economics.
  9. Aner Sela & Ella Segev, 2012. "Multi-Stage Sequential All-Pay Auctions," Working Papers 1211, Ben-Gurion University of the Negev, Department of Economics.
  10. Jun Zhang, 2008. "Simultaneous Signaling in Elimination Contests," Working Papers 1184, Queen's University, Department of Economics.
  11. repec:ebl:ecbull:v:3:y:2008:i:4:p:1-9 is not listed on IDEAS
  12. J. Amegashie & Marco Runkel, 2007. "Sabotaging Potential Rivals," Social Choice and Welfare, Springer, vol. 28(1), pages 143-162, January.
  13. Cohen, Chen & Sela, Aner, 2005. "Manipulations in contests," Economics Letters, Elsevier, vol. 86(1), pages 135-139, January.
  14. Konrad, Kai A & Kovenock, Dan, 2006. "Multi-Stage Contests with Stochastic Ability," CEPR Discussion Papers 5844, C.E.P.R. Discussion Papers.
  15. Johannes Münster, 2007. "Contests with investment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 849-862.
  16. Amegashie, J.A., 2002. "Burning Out in Sequential Elimination Contests," Working Papers 2002-8, University of Guelph, Department of Economics.
  17. Kräkel, Matthias, 2008. "Emotions in tournaments," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 204-214, July.

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