Moschini, GianCarlo

Economic Inquiry Vol. 48 no. 1 (January 2010): 65-79. (Originally published as WP #08021, June 2008)

We 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 dataset 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 Classification: C72, L83, C23

Keywords: Association football, Nash equilibrium, panel data, strategic incentives, supermodularity, tournaments

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