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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.

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Bibliographic Info

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

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  1. Raul Caruso, 2008. "Reciprocity in the shadow of threat," International Review of Economics, Springer, vol. 55(1), pages 91-111, April.
  2. Ernst Fehr & Simon Gaechter, . "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers 040, Institute for Empirical Research in Economics - University of Zurich.
  3. Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
  4. Mark Duggan & Steven D. Levitt, 2002. "Winning Isn't Everything: Corruption in Sumo Wrestling," American Economic Review, American Economic Association, vol. 92(5), pages 1594-1605, December.
  5. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-98, December.
  6. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  7. Nti, Kofi O., 2004. "Maximum efforts in contests with asymmetric valuations," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1059-1066, November.
  8. Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June.
  9. O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
  10. Baik, Kyung Hwan, 1998. "Difference-form contest success functions and effort levels in contests," European Journal of Political Economy, Elsevier, vol. 14(4), pages 685-701, November.
  11. Stefan Szymanski, 2003. "The Assessment: The Economics of Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 467-477, Winter.
  12. 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.
  13. Caruso, Raul, 2007. "Conflict and Conflict Managment with Asymmetric Stakes (The Bad-Cop and the Good Cop part II)," MPRA Paper 1438, University Library of Munich, Germany.
  14. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
  15. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, vol. 76(4), pages 701-15, September.
  16. J. Amegashie, 2006. "A contest success function with a tractable noise parameter," Public Choice, Springer, vol. 126(1), pages 135-144, January.
  17. Ian Preston, 2003. "Cheating in Contests," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 612-624, Winter.
  18. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
  19. Christian Riis & Derek J. Clark, 1997. "Contest success functions: an extension," Economic Theory, Springer, vol. 11(1), pages 201-204.
  20. Gil S. Epstein & Carsten Hefeker, 2003. "Lobbying contests with alternative instruments," Economics of Governance, Springer, vol. 4(1), pages 81-89, 04.
  21. Raul Caruso, 2004. "A Trade Institution as a Peaceful Institution?," Others 0406003, EconWPA, revised 15 Dec 2004.
  22. Raul Caruso, 2005. "Asimmetrie negli incentivi, equilibrio competititvo e impegno agonistico: distorsioni in presenza di doping e combine," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 1(3), pages 13-38, Dicembre.
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