TITLE:
Minimizing Shirking in Auctions and Tournaments
AUTHORS:
Chen Cohen, Moshe Schwartz
KEYWORDS:
Tournaments; Auctions; Nash Equilibrium; Soccer; Draws; All-Pay-Contests
JOURNAL NAME:
Theoretical Economics Letters,
Vol.3 No.4,
July
17,
2013
ABSTRACT:
The
present paper deals with two-player all pay contests in which a tie is due to
slacking, showing that to reduce the likelihood of such an occurrence, slackers
should be denied any reward, or even punished. The denial of reward, or the
punishment, inflicted on substandard performers, may spur some players to
bigger efforts, or induce others to avoid contests in which they are unable to
meet standards. However denying any reward to those making small but not substandard
efforts, would not raise the proportion of those making the maximum effort,
while more competitors would abstain from any effort at all, detracting from
overall performance. The point allocation rule suggested by this paper is thus
shown to improve on its alternatives. The paper proposes changing the rules of
point allocation in soccer, to reduce the incidence of non-scoring draws, often
the outcome of bad playing or of extreme risk avoidance, expressed in purely
defensive game strategies. Under the new rules, a win would award a team with
three points, a scoring draw would entitle the teams to one point each, but
neither team would receive any points for non-scoring draws. We show that this
change would reduce the numbers of games ending in 0:0, while raising the
numbers of goals in other games, thus boosting spectator enjoyment.