Leading-Effect, Risk-Taking and Sabotage in Two-Stage Tournaments: Evidence from a Natural Experiment

Frank Mueller-Langer; Patrick Andreoli-Versbach

doi:10.1515/jbnst-2016-1000

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Leading-Effect, Risk-Taking and Sabotage in Two-Stage Tournaments: Evidence from a Natural Experiment

Frank Mueller-Langer und Patrick Andreoli-Versbach

Veröffentlicht/Copyright: 11. Januar 2017

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Aus der Zeitschrift Jahrbücher für Nationalökonomie und Statistik Band 237 Heft 1

Abstract

Existing theory suggests that three “order effects” may emerge in multi-stage tournaments with information feedback. First, participants adjust effort across stages, which could advantage the leading participant who faces a larger “effective prize” after an initial victory (leading-effect). Second, leading participants might engage in sabotage activities to protect their lead thereby decreasing the rivals’ output. Finally, participants lagging behind may increase risk at the final stage as they have “nothing to lose” (risk-taking). The expected order effects based on existing theory cannot be supported empirically in a natural experiment setting, where professional teams compete in a two-stage tournament with asymmetric initial conditions and clear incentives.

Keywords: tournaments; order effects; leading-effect; risk-taking; sabotage; natural experiments

JEL Classification: C21; C93; D72

Acknowledgments

Both authors have contributed equally to this paper and the alphabetical order in which the authors appear is randomly drawn. We wish to thank Tim Barmby, Charles Knoeber, Dan Kovenock, Uwe Sunde, Theofanis Tsoulouhas, and the participants of the “Tournaments, Contests and Relative Performance Evaluation” conference at NC State (Raleigh, NC, USA). We are also very grateful to Luís Cabral, Luis Garicano, Christos Genakos, Hans Hvide, Martin Kocher, Kai Konrad, Tobias Kretschmer, Sandra Ludwig, Florian Morath, Lionel Page, Ignacio Palacios-Huerta, Klaus Schmidt, Monika Schnitzer, Joachim Winter, and seminar participants at the Ludwig Maximilian University of Munich and the Max Planck Institute for Tax Law and Public Finance for valuable comments. We thank Peter Bayer, Benjamin Heisig, Frank Thomas Merkl, Janis Sussick and Philippe van der Beck for excellent research assistance. We gratefully acknowledge financial support from the Deutsche Forschungsgemeinschaft through GRK 801. Please note that data and codes we used to generate the results of this paper will be available online via the journal website for the purpose of replication or further research.

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Code and Datasets

The author(s) published code and data associated with this article in the ZBW Journal Data Archive, a storage platform for datasets. See: https://doi.org/10.15456/jbnst.2017037.141400.

Appendix

There are four ways of winning the knock-out, which apply in the following order. First, the goal difference rule states that the team that scores more goals on aggregate in the two games qualifies for the next knock-out round. Second, the away goals rule prescribes that if the two teams score the same number of goals over the two games, the team that scores more away goals qualifies for the next knock-out round. Third, Article 7 of the Regulations of the UEFA Champions League 2008/09 states that “if both teams score the same number of goals at home and away, two 15-minute periods of extra time are played at the end of the second leg”. Fourth, “if no goals are scored during extra time, kicks from the penalty mark (…) determine which club qualifies for the next stage.”

The knock-out competition is structured in six steps (Figure 3):

Teams F and S are randomly allocated to play either the first or the second game at home.
The first game is played. Assume without loss of generality that F is the home team in the first game.
The second game is played (S is the home team now).
If the sum of the goals of S is strictly larger (smaller) than those of F, the game ends and S (F) wins the knock-out. If the sums are equal, the team that scored more away goals wins. If also the away goals are equal the game continues at S’s venue.
Supplementary time is played. The team that scores more goals in the supplementary time wins.
If both teams score the same number of goals, penalty kicks are used to determine the winner.

The continuation of the game at S’s venue could be the explanation for the higher point estimate of teams playing the second game home, 52.2 %. As we show in Table 4, there is no significant advantage from playing second at home, but the fact that the game is played on the field of the team playing home second is certainly a small advantage. The percentage of games ending after the second game for the entire dataset with 1,146 observations is 93 %, while 4 % of the games end after supplementary times and 3 % after penalty kicks. The probability of winning for S conditional on reaching supplementary time (penalty kicks) is 57 % (55 %), not significantly different from 50 %.

Figure 3:

Description of the knock-out structure.

Received: 2016-05-21

Revised: 2016-10-02

Accepted: 2016-11-04

Published Online: 2017-01-11

Published in Print: 2019-07-26

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Artikel in diesem Heft

https://doi.org/10.1515/jbnst-2016-1000

Schlagwörter für diesen Artikel

tournaments; order effects; leading-effect; risk-taking; sabotage; natural experiments