Publisher:
CESifo, Center for Economic Studies & Ifo Institute, Munich, Germany
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....
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ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
Signature:
DS 63
Inter-library loan:
No inter-library loan
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.
