Quantifying incentive (in)compatibility: a case study from sports
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Incentive compatibility is usually considered a binary concept in the academic literature. Our paper aims to present a method for quantifying the violation of strategy-proofness in the case of sports tournaments, in particular, through the example of the European Qualifiers for the 2022 FIFA World Cup. Even though that competition is known to be vulnerable to manipulation since certain teams might be interested in the success of other teams, the extent of the problem has remained unexplored until now. Based on computer simulations, the strategic behaviour of the contestants is found to have non-negligible sporting effects. While strategy-proofness cannot be guaranteed without fundamentally changing the tournament design, we can substantially mitigate this threat by adding a carefully chosen set of draw restrictions, which offers a justifiable and transparent solution to improve fairness. Sports governing bodies are encouraged to take our findings into account.
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