Theory and Decision

, Volume 75, Issue 1, pp 85–100 | Cite as

Best-of-two contests with psychological effects

  • Alex Krumer


We study a best-of-two contest with two homogeneous players (teams). The winner is the player who wins in both stages. In the case of one victory for each team, a draw determines the identity of the winner. Each team has a value of winning the contest as well as a value of winning a single game. A team’s value of winning a game at its home field is higher than its value of winning a game away from home. We show that if winning in the first stage provides a psychological advantage in the second stage, each team would prefer to play the second stage at its home field.


Winner-take-all contests All-pay contests Best-of-two contests 

JEL Classifications

D44 O31 O32 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Amaldoss W., Rapoport A. (2009) Excessive expenditure in two-stage contests: Theory and experimental evidence. In: Haugen I. N., Nilsen A. S. (Eds.) Game theory: Strategies, equilibria, and theorems. Nova Science Publishers, Inc, Hauppauge, pp 241–266Google Scholar
  2. Apesteguia J., Palacios-Huerta I. (2010) Psychological pressure in competitive environments: Evidence from a randomized natural experiment. American Economic Review 100: 2548–2564CrossRefGoogle Scholar
  3. Baye M., Kovenock D., de Vries C. (1996) The all-pay auction with complete information. Economic Theory 8: 291–305Google Scholar
  4. Breitmoser Y., Tan J. H. W., Zizzo D. J. (2010) Understanding perpetual R&D races. Economic Theory 44(3): 445–467CrossRefGoogle Scholar
  5. Coffey B., Maloney M. T. (2010) The thrill of victory: Measuring the incentive to win. Journal of Labor Economics 28(1): 87–112CrossRefGoogle Scholar
  6. Courneya K. S., Carron A. V. (1992) The home advantage in sport competitions: A literature review. Journal of Sport and Exercise Psychology 14: 13–27Google Scholar
  7. Deck C., Sheremeta R. M. (2011) Fight or flight? Defending against sequential attacks in the game of Siege. Journal of Conflict Resolution 54: 771–798Google Scholar
  8. DellaVigna S. (2009) Psychology and economics: Evidence from the field. Journal of Economic Literature 47(2): 315–372CrossRefGoogle Scholar
  9. Gonzalez-Diaz J., Palacios-Huerta I. (2010) Pawns of the emotions: Psychological elements in cognitively sophisticated humans. mimeo, New YorkGoogle Scholar
  10. Harris C., Vickers J. (1985) Perfect equilibrium in a model of a race. Review of Economic Studies 52(2): 193–209CrossRefGoogle Scholar
  11. Hillman A., Riley J. (1989) Politically contestable rents and transfers. Economics and Politics 1: 17–39CrossRefGoogle Scholar
  12. Klumpp T., Polborn M. (2006) Primaries and the new hampshire effect. Journal of Public Economics 90: 1073–1114CrossRefGoogle Scholar
  13. Konrad K., Kovenock D. (2009) Multi-battle contests. Games and Economic Behavior 66: 256–274CrossRefGoogle Scholar
  14. Magnus J. R., Klaassen F. J. G. M. (1999) On the advantage of serving first in a tennis set: Four years at Wimbledon. The Statistician (Journal of the Royal Statistical Society, Series D) 48: 247–256CrossRefGoogle Scholar
  15. Mago, S. D., Sheremeta, R. M., & Yates, A. (2011). Best of three contests: Experimental evidence. Working Paper, Chapman University, Orange.Google Scholar
  16. Nevill A. M., Holder R. L. (1999) Home advantage in sport: An overview of studies on the advantage of playing at home. Sports Medicine 28: 221–236CrossRefGoogle Scholar
  17. Page L., Page K. (2007) The second leg home advantage: Evidence from European football cup competitions. Journal of Sports Sciences 25(14): 1547–1556CrossRefGoogle Scholar
  18. Price C. R., Sheremeta R. M. (2011) Endowment effects in contests. Economics Letters 111: 217–219CrossRefGoogle Scholar
  19. Sela A. (2011) Best-of-three all-pay auctions. Economic Letters 112: 67–70CrossRefGoogle Scholar
  20. Sheremeta R. M. (2010) Experimental comparison of multi-stage and one-stage contests. Games end Economic Behavior 68(2): 731–747CrossRefGoogle Scholar
  21. Terry P. C., Walrond N., Carron A. V. (1998) The influence of game location on athletes’ psychological states. Journal of Science and Medicine in Sport 1: 29–37CrossRefGoogle Scholar
  22. Zizzo D. J. (2002) Racing with uncertainty: A patent race experiment. International Journal of Industrial Organization 20: 877–902CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  1. 1.Department of EconomicsBen-Gurion University of the NegevBeer ShevaIsrael

Personalised recommendations