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Optimal and Fair Prizing in Sequential Round-Robin Tournaments: Experimental Evidence

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  • Arne Lauber
  • Christoph March
  • Marco Sahm

Abstract

We report results from the first experimental study of round-robin tournaments. In our experiment, we investigate how the prize structure affects the intensity, fair-ness, and dynamic behavior in sequential round-robin tournaments with three players. We compare tournaments with a second prize equal to either 0%, 50%, or 100% of the first prize. While theory predicts the 50%-treatment to be most intense, we find that aggregate effort is highest in the 0%-treatment. In contrast, our evidence supports the predictions that the 50%-treatment is fairest (though not perfectly fair), whereas the late mover is advantaged in the 100%-treatment and disadvantaged in the 0%-treatment. Also in line with the theory, we identify a strategic (reverse) momentum: after winning the first match, a player increases (decreases) effort in the second match of the 0%-treatment (100%-treatment). Additional findings suggest that dynamic behavior is also subject to a psychological momentum.

Suggested Citation

  • Arne Lauber & Christoph March & Marco Sahm, 2022. "Optimal and Fair Prizing in Sequential Round-Robin Tournaments: Experimental Evidence," CESifo Working Paper Series 9651, CESifo.
  • Handle: RePEc:ces:ceswps:_9651
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    More about this item

    Keywords

    sequential round-robin tournament; all-pay auction; fairness; intensity; strategic momentum; experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • Z20 - Other Special Topics - - Sports Economics - - - General

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