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THE Economics of Match-Fixing

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Author Info
Caruso, Raul

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Abstract

The phenomenon of match-fixing does constitute a constant element of sport contests. This paper presents a simple formal model in order to explain it. The intuition behind is that an asymmetry in the evaluation of the stake is the key factor leading to match-fixing. In sum, this paper considers a partial equilibrium model of contest where two asymmetric, rational and risk-neutral opponents evaluate differently a contested stake. Differently from common contest models, agents have the option of choosing a second instrument to affect the outcome of the contest. The second instrument is assumed to capture positive investments in ‘contest management’ – namely efforts paving the way for a match-fixing. In particular, it will be demonstrated that, under some conditions, an asymmetry in the evaluation of the stake can lead to a concession from one agent to the other and then to a match-fixing. Eventually the intuitions and results of the model will be applied to make a comparison between the FIFA World Cup and the UEFA Champions League tournaments.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3085.

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Date of creation: May 2007
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Handle: RePEc:pra:mprapa:3085

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Related research
Keywords: Contest Football Sport Contest Contest Management Match-Fixing Asymmetry in evaluation Concession FIFA UEFA CHampions League World Cup.

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Find related papers by JEL classification:
L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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    Other versions:
  2. Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March. [Downloadable!] (restricted)
  3. Raul Caruso, 2004. "A Trade Institution as a Peaceful Institution?," Others 0406003, EconWPA, revised 15 Dec 2004. [Downloadable!]
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    Other versions:
  5. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
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  7. Caruso, Raul, 2007. "Reciprocity in the shadow of Threat," MPRA Paper 1788, University Library of Munich, Germany. [Downloadable!]
  8. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, vol. 76(4), pages 701-15, September. [Downloadable!] (restricted)
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  9. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April. [Downloadable!] (restricted)
  10. Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June. [Downloadable!] (restricted)
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  15. Caruso, Raul, 2006. "Conflict and Conflict Management with Interdependent Instruments and Asymmetric Stakes,(The Good-Cop and the Bad-Cop Game)," MPRA Paper 214, University Library of Munich, Germany, revised Sep 2006. [Downloadable!]
    Other versions:
  16. Ian Preston, 2003. "Cheating in Contests," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 612-624, Winter.
  17. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics. [Downloadable!]
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  19. Nti, Kofi O., 2004. "Maximum efforts in contests with asymmetric valuations," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1059-1066, November. [Downloadable!] (restricted)
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