nep-spo New Economics Papers
on Sports and Economics
Issue of 2022‒05‒30
two papers chosen by
Humberto Barreto
DePauw University

  1. Optimal and fair prizing in sequential round-robin tournaments: Experimental evidence By Lauber, Arne; March, Christoph; Sahm, Marco
  2. An Evaluation of Churchill Downs’ Tax Increment Financing District By Lambert, Thomas

  1. By: Lauber, Arne; March, Christoph; Sahm, Marco
    Abstract: We report results from the first experimental study of round-robin tournaments. In our experiment, we investigate how the prize structure affects the intensity, fairness, and dynamic behavior in sequential round-robin tournaments with three players. We compare tournaments with a second prize equal to either 0%, 50%, or 100% of the first prize. While theory predicts the 50%-treatment to be most intense, we find that aggregate effort is highest in the 0%-treatment. In contrast, our evidence supports the predictions that the 50%-treatment is fairest (though not perfectly fair), whereas the late mover is advantaged in the 100%-treatment and disadvantaged in the 0%-treatment. Also in line with the theory, we identify a strategic (reverse) momentum: after winning the first match, a player increases (decreases) effort in the second match of the 0%-treatment (100%-treatment). Additional findings suggest that dynamic behavior is also subject to a psychological momentum.
    Keywords: Sequential Round-Robin Tournament,All-pay Auction,Fairness,Intensity,Strategic Momentum,Experiment
    JEL: C72 C91 D72 Z20
    Date: 2022
  2. By: Lambert, Thomas
    Abstract: Tax Increment Financing Districts (TIFs) have become important local government tools in the USA over the last several decades as ways to help bring public and/or private investment dollars into inner city areas and/or older neighborhoods which are deemed to need revitalization. Within the last 10 years, the concept has become popular in Canada, and it has been used as a component piece of enterprise zone programs in other nations. This paper evaluates one of the first Kentucky USA TIFs started around 20 years ago with a preeminent Kentucky horse racing track, Churchill Downs, as the target for investment spending. Some of the desired spinoff effects of such investment are to help bring jobs, investment, and general economic growth to an older and low-income neighborhood which surrounds the track. This paper finds mixed results regarding these outcomes for the area surrounding Churchill Downs.
    Keywords: Churchill Downs, Economic Development, Horse Racing, Sports, Tax Increment Financing Districts (TIFs)
    JEL: R11 R38 R58
    Date: 2022–05–03

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