Why the three-point rule failed to sufficiently reduce the number of draws in soccer: An application of Prospect Theory


Incentives guide human behavior by altering the level of external motivation. We apply the idea of loss aversion from Prospect Theory (Kahneman & Tversky, 1979) to the point reward systems in soccer and investigate the controversial impact of the "three-point-rule" on reducing the fraction of draws in this sport (Moschini, 2011, Dilger & Geyer, 2009). Making use of the Poisson nature of goal scoring and applying the prospect theory, we compared empirical results with theoretically deduced draw ratios from 24 countries encompassing 20 seasons each (N=118.148 matches). The rule change yielded a slight reduction in the ratio of draws, but despite adverse incentives, still 18% more matches ended drawn than expected (t(23)=11.04,p<.001,d=2.25), consistent to Prospect Theory assertions. Alternative point systems (e.g., in Bulgaria, and other leagues) that manipulated incentives for losses yielded reductions to or beneath statistical expectation. Surprisingly, in addition, an anticipation effect was found – effects in the expected direction were already found two seasons before the introduction of the rule change took place in the concerend league. The results provide support for the deduced concept of how arbitrary aims, like the reduction of draws in the world's soccer leagues, could be more effectively accomplished than currently attempted. Dilger, A., & Geyer, H. (2009). Are Three Points for a Win Really Better Than Two? A Comparison of German Soccer League and Cup Games. Journal of Sports Economics, 10(3), 305–318. Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263–291. Moschini, G. (2010). Incentives and outcomes in a strategic setting: The 3-points-for-a-win system in soccer. Economic Inquiry, 48(1), 65–79.