People Respond to Incentives: Lesson 34 Trillion

But still some people don’t learn. Consider recent events in Olympic Badminton:

Two South Korean pairs, a Chinese and an Indonesian team will be stripped of their place in the quarterfinals unless an appeal against the punishment is granted. All four teams were determined to have tried to lose their final matches in the women’s doubles group stage in order to secure a more favorable draw in the knockout round.

This led to truly ridiculous matches, which you can watch here. And honestly, I don’t blame them one bit. Part of winning is strategy and if you can (in part) control who your opponent is by losing in the short-term to have a better shot at winning in the long-term (i.e. winning the gold medal) why not do it? The format of the tournament was designed such that this strategy became the most likely to get teams to the medal stand:

While the matches led to ugly scenes of players deliberately serving into the net while the Wembley Arena crowd booed and jeered, it is the organizers of this event who are responsible for allowing the tanking to happen in the first place. By implementing a controversial group system instead of a single-elimination format as used previously, Games chiefs left themselves open to the kind of nightmare that transpired late Tuesday.

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