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The Predictive Power of Three Prominent Tournament Formats

Author

Listed:
  • Dmitry Ryvkin

    () (Department of Economics, Florida State University, Tallahassee, Florida 32306)

  • Andreas Ortmann

    () (CERGE-EI, Charles University and Academy of Sciences, Prague, Czech Republic)

Abstract

Tournaments of heterogeneous candidates can be thought of as probabilistic mechanisms that select high-quality agents. We quantify the efficiency of such selection by the likelihood of selecting the best player, here termed the "predictive power." We study three widely used tournament formats: contests, binary elimination tournaments, and round-robin tournaments. Using a simple model, we demonstrate analytically, and through simulations, how the predictive power of these formats depends on the number of players, noise level, and distribution of players' types. We also present the results of exploratory simulations for two alternative criteria of selection efficiency: the expected ability of the winner and the expected rank of the winner. All three criteria may exhibit unexpected nonmonotonic behavior as functions of the number of players and/or noise level. We discuss the conditions under which different types of behavior should be expected, and their implications for managerial decisions.

Suggested Citation

  • Dmitry Ryvkin & Andreas Ortmann, 2008. "The Predictive Power of Three Prominent Tournament Formats," Management Science, INFORMS, vol. 54(3), pages 492-504, March.
  • Handle: RePEc:inm:ormnsc:v:54:y:2008:i:3:p:492-504
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    File URL: http://dx.doi.org/10.1287/mnsc.1070.0856
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bortolotti, Stefania & Devetag, Giovanna & Ortmann, Andreas, 2016. "Group incentives or individual incentives? A real-effort weak-link experiment," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 60-73.
    2. Loukas Balafoutas & E. Glenn Dutcher & Florian Lindner & Dmitry Ryvkin, 2017. "The Optimal Allocation Of Prizes In Tournaments Of Heterogeneous Agents," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 461-478, January.
    3. Rudi Stracke & Wolfgang Höchtl & Rudolf Kerschbamer & Uwe Sunde, 2015. "Incentives and Selection in Promotion Contests: Is It Possible to Kill Two Birds with One Stone?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 36(5), pages 275-285, July.
    4. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Biased contests for symmetric players," Games and Economic Behavior, Elsevier, vol. 103(C), pages 116-144.
    5. Dutcher, E. Glenn & Balafoutas, Loukas & Lindner, Florian & Ryvkin, Dmitry & Sutter, Matthias, 2015. "Strive to be first or avoid being last: An experiment on relative performance incentives," Games and Economic Behavior, Elsevier, vol. 94(C), pages 39-56.
    6. Krumer, Alex & Megidish, Reut & Sela, Aner, 2014. "Round-Robin Versus Elimination in Tournaments with a Dominant Player," CEPR Discussion Papers 10081, C.E.P.R. Discussion Papers.
    7. Lindner, Florian & Dutcher, E. Glenn & Balafoutas, Loukas & Ryvkin, Dmitry & Sutter, Matthias, 2013. "Strive to be first and avoid being last: An experiment on relative performance incentives," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79885, Verein für Socialpolitik / German Economic Association.
    8. Dmitry Ryvkin, 2009. "Tournaments of Weakly Heterogeneous Players," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(5), pages 819-855, October.
    9. Ryvkin, Dmitry, 2010. "The selection efficiency of tournaments," European Journal of Operational Research, Elsevier, vol. 206(3), pages 667-675, November.
    10. Ruud H. Koning & Ian G. McHale, 2012. "Estimating Match and World Cup Winning Probabilities," Chapters,in: International Handbook on the Economics of Mega Sporting Events, chapter 11 Edward Elgar Publishing.
    11. Erez, Eyal & Sela, Aner, 2010. "Round-Robin Tournaments with Effort Constraints," CEPR Discussion Papers 8021, C.E.P.R. Discussion Papers.
    12. Krumer, Alex & Megidish, Reut & Sela, Aner, 2014. "Optimal Allocations in Round-Robin Tournaments," CEPR Discussion Papers 9873, C.E.P.R. Discussion Papers.

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