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Optimal seedings in elimination tournaments revisited

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  • Matthias Kräkel

    (University of Bonn)

Abstract

The paper addresses the problem of optimally matching heterogeneous players in a two-stage two-type Lazear–Rosen tournament in which the semifinal losers are eliminated. The organizer of the tournament can either choose two homogeneous semifinals—one between two strong players and the other one between two weak players—or two heterogeneous semifinals, each between one strong and one weak player. I identify conditions under which the organizer is strictly better off from two homogeneous semifinals if he wants to maximize total expected effort and the strong players’ win probability. This finding is contrary to both the typical procedure used in real sporting contests and previous results based on all-pay auctions and the Tullock contest. Hence, my findings point out that the optimal design of elimination tournaments crucially depends on the underlying contest-success technology.

Suggested Citation

  • Matthias Kräkel, 2014. "Optimal seedings in elimination tournaments revisited," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(1), pages 77-91, April.
    • Handle: RePEc:spr:etbull:v:2:y:2014:i:1:d:10.1007_s40505-014-0030-z
    DOI: 10.1007/s40505-014-0030-z
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    Cited by:

    1. Netanel Nissim & Aner Sela, 2020. "The Third Place Game," Journal of Sports Economics, , vol. 21(1), pages 64-86, January.
    2. Sela, Aner, 2022. "Effort allocations in elimination tournaments," Economics Letters, Elsevier, vol. 211(C).
    3. Hörtnagl-Pozzo, Tanja & Kerschbamer, Rudolf & Oexl, Regine & Stracke, Rudi & Sunde, Uwe, 2023. "Heterogeneity in rent-seeking contests with multiple stages: Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    4. Karpov, Alexander, 2015. "A theory of knockout tournament seedings," Working Papers 0600, University of Heidelberg, Department of Economics.
    5. Chen Cohen & Ishay Rabi & Aner Sela, 2023. "Optimal seedings in interdependent contests," Annals of Operations Research, Springer, vol. 328(2), pages 1263-1285, September.

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    More about this item

    Keywords

    Lazear–Rosen tournament; Heterogeneous match; Homogeneous match;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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