IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/3085.html
   My bibliography  Save this paper

THE Economics of Match-Fixing

Author

Listed:
  • Caruso, Raul

Abstract

The phenomenon of match-fixing does constitute a constant element of sport contests. This paper presents a simple formal model in order to explain it. The intuition behind is that an asymmetry in the evaluation of the stake is the key factor leading to match-fixing. In sum, this paper considers a partial equilibrium model of contest where two asymmetric, rational and risk-neutral opponents evaluate differently a contested stake. Differently from common contest models, agents have the option of choosing a second instrument to affect the outcome of the contest. The second instrument is assumed to capture positive investments in ‘contest management’ – namely efforts paving the way for a match-fixing. In particular, it will be demonstrated that, under some conditions, an asymmetry in the evaluation of the stake can lead to a concession from one agent to the other and then to a match-fixing. Eventually the intuitions and results of the model will be applied to make a comparison between the FIFA World Cup and the UEFA Champions League tournaments.

Suggested Citation

  • Caruso, Raul, 2007. "THE Economics of Match-Fixing," MPRA Paper 3085, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:3085
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/3085/1/MPRA_paper_3085.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    3. Ian Preston, 2003. "Cheating in Contests," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(4), pages 612-624, Winter.
    4. Caruso, Raul, 2007. "Conflict and Conflict Managment with Asymmetric Stakes (The Bad-Cop and the Good Cop part II)," MPRA Paper 1438, University Library of Munich, Germany.
    5. Caruso Raul, 2006. "Conflict and Conflict Management with Interdependent Instruments and Asymmetric Stakes, (The Good-Cop and the Bad-Cop Game)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 12(1), pages 1-53, September.
    6. Raul Caruso, 2008. "Reciprocity in the shadow of threat," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 55(1), pages 91-111, April.
    7. J. Amegashie, 2006. "A contest success function with a tractable noise parameter," Public Choice, Springer, vol. 126(1), pages 135-144, January.
    8. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, March.
    9. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, vol. 76(4), pages 701-715, September.
    10. Raul Caruso, 2005. "Asimmetrie negli incentivi, equilibrio competititvo e impegno agonistico: distorsioni in presenza di doping e combine," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 1(3), pages 13-38, Dicembre.
    11. Christian Riis & Derek J. Clark, 1997. "Contest success functions: an extension," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 201-204.
    12. Mark Duggan & Steven D. Levitt, 2002. "Winning Isn't Everything: Corruption in Sumo Wrestling," American Economic Review, American Economic Association, vol. 92(5), pages 1594-1605, December.
    13. Jack Hirshleifer, 1989. "Conflict and rent-seeking success functions: Ratio vs. difference models of relative success," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 251-262, Springer.
    14. Baik, Kyung Hwan, 1998. "Difference-form contest success functions and effort levels in contests," European Journal of Political Economy, Elsevier, vol. 14(4), pages 685-701, November.
    15. Walter C. Neale, 1964. "The Peculiar Economics of Professional Sports," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(1), pages 1-14.
    16. Kai A. Konrad, 2000. "Sabotage in Rent-Seeking Contests," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 409-419, Springer.
    17. Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June.
    18. Pavlo Blavatskyy, "undated". "Contest success function with the possibility of a draw: axiomatization," IEW - Working Papers 208, Institute for Empirical Research in Economics - University of Zurich.
    19. O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
    20. Raul Caruso, 2004. "A Trade Institution as a Peaceful Institution?," Others 0406003, University Library of Munich, Germany, revised 02 May 2005.
    21. Gil S. Epstein & Carsten Hefeker, 2003. "Lobbying contests with alternative instruments," Economics of Governance, Springer, vol. 4(1), pages 81-89, April.
    22. Stefan Szymanski, 2003. "The Assessment: The Economics of Sport," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(4), pages 467-477, Winter.
    23. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    24. Nti, Kofi O., 2004. "Maximum efforts in contests with asymmetric valuations," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1059-1066, November.
    25. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation," International Economic Association Series, in: L.-A. Gérard-Varet & S.-C. Kolm & J. Mercier Ythier (ed.), The Economics of Reciprocity, Giving and Altruism, chapter 7, pages 153-173, Palgrave Macmillan.
    26. Avinash Dixit, 2008. "Strategic Behavior in Contests," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 431-438, Springer.
    27. Nti, Kofi O, 1999. "Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-430, March.
    28. Kyung Hwan Baik & Shogren, Jason F., 1995. "Contests with spying," European Journal of Political Economy, Elsevier, vol. 11(3), pages 441-451, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raul Caruso, 2009. "The Basic Economics of Match Fixing in Sport Tournaments," Economic Analysis and Policy, Elsevier, vol. 39(3), pages 355-377, December.
    2. Raul Caruso, 2008. "Reciprocity in the shadow of threat," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 55(1), pages 91-111, April.
    3. Caruso Raul, 2006. "Conflict and Conflict Management with Interdependent Instruments and Asymmetric Stakes, (The Good-Cop and the Bad-Cop Game)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 12(1), pages 1-53, September.
    4. Cedric Duvinage & Peter-J. Jost, 2019. "The Role of Referees in Professional Sports Contests," Journal of Sports Economics, , vol. 20(8), pages 1014-1050, December.
    5. Jia, Hao & Skaperdas, Stergios & Vaidya, Samarth, 2013. "Contest functions: Theoretical foundations and issues in estimation," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 211-222.
    6. Konrad, Kai A., 2007. "Strategy in contests: an introduction [Strategie in Turnieren – eine Einführung]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, WZB Berlin Social Science Center.
    7. Markus LANG & Alexander RATHKE & Marco RUNKEL, 2010. "The Economic Consequences Of Foreigner Rules In National Sports Leagues," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 47-64.
    8. Sakshi Gupta & Ram Singh, 2018. "On Existence and Properties of Pure-strategy Equilibria under Contests," Working Papers id:12840, eSocialSciences.
    9. Raul Caruso, 2007. "Continuing Conflict and Stalemate: A note," Economics Bulletin, AccessEcon, vol. 4(17), pages 1-8.
    10. Helmut Dietl & Egon Franck & Martin Grossmann & Markus Lang, 2009. "Contest Theory and its Applications in Sports," Working Papers 0105, University of Zurich, Institute for Strategy and Business Economics (ISU).
    11. André de Palma & Soumyanetra Munshi, 2012. "Multi-player, Multi-prize, Imperfectly Discriminating Contests," Working Papers hal-00683688, HAL.
    12. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    13. Hao Jia & Stergios Skaperdas, 2011. "Technologies of Conflict," Working Papers 101111, University of California-Irvine, Department of Economics.
    14. Kenan Huremović, 2021. "A noncooperative model of contest network formation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(2), pages 275-317, April.
    15. Raul Caruso & Andrea Locatelli, 2008. "Deadly contests: An economic note on al Qaeda's reward system," Economics of Peace and Security Journal, EPS Publishing, vol. 3(2), pages 62-67, July.
    16. Matthias Kräkel, 2014. "Sandbagging," Journal of Sports Economics, , vol. 15(3), pages 263-284, June.
    17. Raul Caruso, 2012. "Differentials in property Rights in a two-sector economy," Revue d'économie politique, Dalloz, vol. 122(2), pages 257-278.
    18. Ansink, Erik, 2011. "The Arctic scramble: Introducing claims in a contest model," European Journal of Political Economy, Elsevier, vol. 27(4), pages 693-707.
    19. André Palma & Soumyanetra Munshi, 2019. "Multi-player, Multi-prize, Imperfectly Discriminating Contests," Methodology and Computing in Applied Probability, Springer, vol. 21(2), pages 593-632, June.
    20. Raul Caruso, 2009. "Spesa pubblica e criminalità organizzata in Italia: evidenza empirica su dati Panel nel periodo 1997-2003," Economia & lavoro, Carocci editore, issue 1, pages 1-73.

    More about this item

    Keywords

    Contest; Football; Sport Contest; Contest Management; Match-Fixing; Asymmetry in evaluation; Concession; FIFA; UEFA; CHampions League; World Cup;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:3085. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.