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THE Economics of Match-Fixing

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  • Caruso, Raul

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.

Suggested Citation

  • Caruso, Raul, 2007. "THE Economics of Match-Fixing," MPRA Paper 3085, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:3085
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    References listed on IDEAS

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    More about this item

    Keywords

    Contest; Football; Sport Contest; Contest Management; Match-Fixing; Asymmetry in evaluation; Concession; FIFA; UEFA; CHampions League; World Cup;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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