INCENTIVES AND OUTCOMES IN A STRATEGIC SETTING: THE 3-POINTS-FOR-A-WIN SYSTEM IN SOCCER

"I exploit a major structural change that has occurred in world soccer to study the impact of incentives on outcomes in a strategic setting. A game-theoretic model is developed that captures some essential strategic elements of soccer vis-à-vis the number of points awarded to a win. The observable implications of the model are tested using a large data set that spans 30 years and 35 countries. The empirical results support the theoretical model and show that the 3-point system has led to a statistically significant increase in the expected number of goals and a decrease in the fractions of drawn matches." ("JEL" C72, L83, C23) Copyright (c) 2008 Western Economic Association International.