Selecting the Best? Spillover and Shadows in Elimination Tournaments

44 Pages Posted: 3 Dec 2011 Last revised: 14 Sep 2015

See all articles by Jennifer Brown

Jennifer Brown

University of Utah - Department of Finance

Dylan Minor

Anderson School of Management (UCLA)

Date Written: December 2011

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--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--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 been already been priced into betting markets.

Suggested Citation

Brown, Jennifer and Minor, Dylan, Selecting the Best? Spillover and Shadows in Elimination Tournaments (December 2011). NBER Working Paper No. w17639. Available at SSRN: https://ssrn.com/abstract=1967373

Jennifer Brown

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

Dylan Minor

Anderson School of Management (UCLA) ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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