Mechanism Design in Sport Matches: Competitive Balance, Intermediate Targets, and Effort Elicitation in a Three-Stage Contest Game

Abstract

In sport, various examples of intermediate match targets exist that advantage the target-achieving party’s match outcome. We examine said targets within paired, multi-stage Tullock contest games, one a nested contest with intermediate target and one without. In equilibrium, the aggregate match-effort maximizing League sets a substantial subsequent match advantage to the target-achieving party. The nested Tullock contest with intermediate target elicits higher aggregate match effort than any one-shot Tullock contest. The effect of intermediate targets is fully consistent with that of an aggregate effort eliciting mechanism employed by leagues. Extant empirical literature finds clear demand for such a mechanism.