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Selecting the Best? Spillover and Shadows in Elimination Tournaments

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  • Jennifer Brown

    () (Kellogg School of Management, Northwestern University, Evanston, Illinois 60208; and National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • Dylan B. Minor

    () (Kellogg School of Management, Northwestern University, Evanston, Illinois 60208)

Abstract

We consider how past, current, and future competition within an elimination tournament affect the probability that the stronger player wins. We present a two-stage model that yields the following main results: (1) a shadow effect wherein the stronger the expected future competitor, the lower the probability that the stronger player wins in the current stage; and (2) an effort spillover effect wherein previous effort reduces the probability that the stronger player wins in the current stage. We test our theory predictions using data from high-stakes tournaments. Empirical results suggest that shadow and spillover effects influence match outcomes and have already been priced into betting markets. This paper was accepted by Bruno Cassiman, business strategy.

Suggested Citation

  • Jennifer Brown & Dylan B. Minor, 2014. "Selecting the Best? Spillover and Shadows in Elimination Tournaments," Management Science, INFORMS, vol. 60(12), pages 3087-3102, December.
  • Handle: RePEc:inm:ormnsc:v:60:y:2014:i:12:p:3087-3102
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    File URL: http://dx.doi.org/10.1287/mnsc.2014.2014
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Christian Deutscher & Marco Sahm & Sandra Schneemann & Hendrik Sonnabend, 2019. "Strategic Investment Decisions in Multi-stage Contests with Heterogeneous Players," CESifo Working Paper Series 7474, CESifo Group Munich.
    2. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Biased contests for symmetric players," Games and Economic Behavior, Elsevier, vol. 103(C), pages 116-144.
    3. Liam J. A. Lenten, 2016. "Mitigation of Perverse Incentives in Professional Sports Leagues with Reverse-Order Drafts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 49(1), pages 25-41, August.
    4. repec:eee:jeborg:v:161:y:2019:i:c:p:52-67 is not listed on IDEAS

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