Road Warrior Booty: Prize Structures in Motorcycle Racing

21 Pages Posted: 5 Jun 2000

See all articles by Kristina Terkun

Kristina Terkun

Clemson University - John E. Walker Department of Economics

Michael T. Maloney

Clemson University - John E. Walker Department of Economics

Date Written: March 16, 2000

Abstract

We look at the tournament organizer and its equilibrium adaptation of the tournament structure in the face of competition from other organizers. The data examined come from the motorcycle racing industry. Bikers in a single race compete for the awards of several sponsors and many sponsors are in direct competition. When a racer chooses to compete for the prizes offered by one sponsor, prizes paid by sponsors of similar products are foregone. We find that there is systematic variation in the structure of prize differentials in the face of direct competition among sponsors for endorsements by racers. When the purse paid by competitors goes up, a sponsor must raise its own purse or reduce its incentive intensity by lowering the spread of the prizes that it pays. This finding supports a prediction of the tournament model developed by Lazear and Rosen.

JEL Classification: L11, L14, L83, M37

Suggested Citation

Terkun, Kristina and Maloney, Michael T., Road Warrior Booty: Prize Structures in Motorcycle Racing (March 16, 2000). Available at SSRN: https://ssrn.com/abstract=213389 or http://dx.doi.org/10.2139/ssrn.213389

Kristina Terkun (Contact Author)

Clemson University - John E. Walker Department of Economics ( email )

223 Sirrine hall
Clemson, SC 29634
United States

Michael T. Maloney

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States
864-656-3430 (Phone)
864-656-4192 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
121
Abstract Views
2,067
rank
282,048
PlumX Metrics