Team vs. Individual Tournaments: Evidence from Prize Structure in eSports

20 Pages Posted: 2 Jun 2016

See all articles by Dennis Coates

Dennis Coates

University of Maryland, Baltimore County

Petr Parshakov

National Research University Higher School of Economics

Date Written: June 1, 2016

Abstract

This study tests the implications of tournament theory using data on eSports (video game) competitions. We incorporate team production with the theory of rank order elimination tournaments since in our analysis, competitors in an elimination tournament are groups rather than individuals. In this setting, the issue of proper incentives becomes more complicated than in the normal tournament model. Our findings demonstrate that the prize structure is convex in rank order which means that the contestants in eSports tournaments are risk averse. The results for the team games are more consistent with the tournament theory than the results for individual games. From the practical point of view, we provide decision-makers in both sports and business with the insights about the compensation design with respect to importance of the competition and its type.

Keywords: tournament theory, eSports, video games, team production

JEL Classification: Z20, J3

Suggested Citation

Coates, Dennis and Parshakov, Petr, Team vs. Individual Tournaments: Evidence from Prize Structure in eSports (June 1, 2016). Higher School of Economics Research Paper No. WP BRP 138/EC/2016, Available at SSRN: https://ssrn.com/abstract=2787819 or http://dx.doi.org/10.2139/ssrn.2787819

Dennis Coates

University of Maryland, Baltimore County ( email )

1000 Hilltop Circle
Baltimore, MD 21250
United States
410-455-3243 (Phone)
410-455-1054 (Fax)

Petr Parshakov (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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