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

Authors

  • GIANCARLO MOSCHINI

    1. Moschini: Professor and Pioneer Chair in Science and Technology Policy, Department of Economics, Iowa State University, Ames, IA 50011. Phone (515) 294-5761, Fax (515) 294-6336, E-mail moschini@iastate.edu
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      I am grateful to Xin Pan for his expert research assistance in assembling the data set and I would like to thank Harvey Lapan for commenting on an earlier draft.


Abstract

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)

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