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Selecting the Best? Spillover and Shadows in Elimination Tournaments

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2014

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Brown, Jennifer, and Dylan B. Minor. "Selecting the Best? Spillover and Shadows in Elimination Tournaments." Management Science 60, no. 12 (December 2014): 3087–3102.

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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 already been priced into betting markets.

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elimination tournament, dynamic contest, contest design, effort choice, betting markets

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