University of Pennsylvania ScholarlyCommons Health Care Management Papers Wharton Faculty Research 12-2002 Winning Isn’t Everything: Corruption in Sumo Wrestling Mark Duggan University of Pennsylvania Steven D. Levitt Follow this and additional works at: https://repository.upenn.edu/hcmg_papers Part of the Other Economics Commons, and the Sports Management Commons Recommended Citation Duggan, M., & Levitt, S. D. (2002). Winning Isn’t Everything: Corruption in Sumo Wrestling. American Economic Review, 92 (5), 1594-1605. http://dx.doi.org/10.1257/000282802762024665 This paper is posted at ScholarlyCommons. https://repository.upenn.edu/hcmg_papers/82 For more information, please contact [email protected]. Winning Isn’t Everything: Corruption in Sumo Wrestling Abstract Although theory on corruption is well developed, it has proven difficulto t isolate corrupt behavior empirically. In this paper, we provide overwhelming statistical evidence documenting match rigging in Japanese sumo wrestling. A non-linearity in the incentive structure of promotion leads to gains from trade between wrestlers on the margin for achieving a winning record and their opponents. We show that wrestlers win a disproportionate share of the matches when they are on the margin. Collusion, rather than increased effort, appears to explain the results. Wrestlers who are victorious when needing a victory lose more often than would be expected the next time they meet that same opponent, suggesting that part of the payment for throwing a match is future payment in kind. Cheating disappears in times of high media scrutiny. In addition to collusion by individual wrestlers, there is also evidence of reciprocity agreements across stables of wrestlers, suggesting a centralized element to the match rigging. Disciplines Other Economics | Sports Management This journal article is available at ScholarlyCommons: https://repository.upenn.edu/hcmg_papers/82 Winning Isn’t Everything: Corruption in Sumo Wrestling By MARK DUGGAN AND STEVEN D. LEVITT* There is a growing appreciation among econ- (roughly 5 feet 2 inches to 5 feet 3 inches) and omists of the need to better understand the role an excess number of men below 1.57 meters. that corruption plays in real-world economies. Not coincidentally, the minimum height for Although some have argued that it can be wel- conscription into the Imperial army was 1.57 fare enhancing (Nathaniel Leff, 1964), most meters (Stephen Stigler, 1986). More recent em- commentators believe that a willingness to ac- pirical work on corruption includes Robert H. cept bribes (or similar forms of corruption) in Porter and J. Douglas Zona (1993), which finds either the public or the private sector reduces evidence that construction companies collude economic efficiency (Andrei Shleifer and when bidding for state highway contracts by Robert W. Vishny, 1993). As a result, govern- meeting before the auction, designating a seri- ments and firms often create incentives to mo- ous bidder, and having other cartel members tivate their employees to be honest (Gary S. submit correspondingly higher bids. R. Preston Becker and George J. Stigler, 1974). McAfee (1992) details a wide variety of bid- While it is generally agreed that corruption is rigging schemes. Paulo Mauro (1995) uses sub- widespread, there is little rigorous empirical jective indices of corruption across countries to research on the subject. Because of corruption’s demonstrate a correlation between corrupt gov- illicit nature, those who engage in corruption ernments and lower rates of economic growth, attempt not to leave a trail. As a consequence, although the relationship may not be causal. much of the existing evidence on corruption is Ray Fisman (2001) analyzes how stock prices anecdotal in nature. More systematic empirical of Indonesian firms fluctuate with changes in substantiation of corrupt practices is unlikely to former Prime Minister Suharto’s health status. appear in typical data sources. Rather, research- Firms with close connections to Suharto, which ers must adopt nonstandard approaches in an presumably benefit from corruption within the attempt to ferret out indirect evidence of regime, decline substantially more than other corruption. Indonesian firms when Suharto’s health weak- To date, there have been only a handful of ens. Whether the rents accruing to those close to studies that attempt to systematically document Suharto are due to corruption or simply bad the impact of corruption on economic out- policy, however, is hard to determine. Rafael Di comes. The first empirical study of corruption Tella and Ernesto Schargrodsky (2000) docu- dates to 1846 when Quetelet documented that ment that the prices paid for basic inputs at the height distribution among French males public hospitals in Buenos Aires fall by 10–20 based on measurements taken at conscription percent after a corruption crackdown. was normally distributed except for a puzzling In this paper we look for corruption among shortage of men measuring 1.57–1.597 meters Japan’s elite sumo wrestlers. While acknowl- edging that sumo wrestling is not itself a subject of direct interest to economists, we believe that * Duggan: Department of Economics, University of Chi- this case study nonetheless provides potentially cago, 1126 East 59th Street, Chicago, IL 60637, and National valuable insights. First, if corrupt practices Bureau of Economic Research (e-mail: mduggan@midway thrive here, one might suspect that no institution .uchicago.edu); Levitt: American Bar Foundation and De- is safe. Sumo wrestling is the national sport of partment of Economics, University of Chicago, 1126 East 59th Street, Chicago, IL 60637 (e-mail: slevitt@midway Japan, with a 2,000-year tradition and a focus .uchicago.edu). We would like to thank Gary Becker, Casey on honor, ritual, and history that may be unpar- Mulligan, Andrei Shleifer, Stephen Stigler, Mark West, two alleled in athletics.1 Moreover, Japan is generally anonymous referees, seminar participants, and especially Serguey Braguinsky for helpful comments. Kyung-Hong Park provided truly outstanding research assistance. Levitt gratefully acknowledges the research support of the Na- 1 See Mark West (1997) for an examination of the legal tional Science Foundation and Sloan Foundation. rules and informal norms that govern sumo wrestling in Japan. 1594 VOL. 92 NO. 5 DUGGAN AND LEVITT: CORRUPTION IN SUMO WRESTLING 1595 found to have relatively low rates of corruption in cross-country comparisons (Transparency In- ternational, 2000).2 Second, because of the sim- plicity of the institutional framework, it is easy to understand and model the incentives facing participants. Third, data to test for match rig- ging are readily available. While the exact tech- niques we utilize for studying corrupt behavior in sumo wrestling will require modification be- fore being applied to more substantive applica- tions, our analysis may nonetheless aid future researchers in that task. The key institutional feature of sumo wres- tling that makes it ripe for corruption is the FIGURE 1. PAYOFF TO TOURNAMENT WINS existence of a sharp nonlinearity in the payoff function for competitors. A sumo tournament (basho) involves 66 wrestlers (rikishi) partici- typical victory. Consequently, a wrestler enter- pating in 15 bouts each. A wrestler who ing the final match of a tournament with a 7-7 achieves a winning record (eight wins or more, record has far more to gain from a victory than known as kachi-koshi) is guaranteed to rise up an opponent with a record of, say, 8-6 has to the official ranking (banzuke); a wrestler with a lose. There will also be incentives for forward- losing record (make-koshi) falls in the rankings. looking wrestlers to rig matches on earlier days A wrestler’s rank is a source of prestige, the of the tournament.4 According to our rough basis for salary determination, and also influ- calculations, moving up a single spot in the ences the perks that he enjoys.3 rankings is worth on average approximately Figure 1 demonstrates empirically the impor- $3,000 a year to a wrestler, so the potential tance of an eighth win to a wrestler. The hori- gains to trade may be substantial if the wrestlers zontal axis of the figure is the number of wins a fix a match.5 Of course, no legally binding wrestler achieves in a tournament; the vertical contract can be written. axis is the average change in rank as a conse- In this paper, we examine more than a decade quence of the tournament. The change in rank is of data for Japan’s sumo elite in search of a positive function of the number of wins. With evidence demonstrating or refuting claims of the exception of the eighth win, the relationship match rigging. We uncover overwhelming evi- is nearly linear: each additional victory is worth dence that match rigging occurs in the final days approximately three spots in the rankings. The of sumo tournaments. Wrestlers who are on the critical eighth win—which results in a substan- margin for attaining their eighth victory win far tial promotion in rank rather than a demotion— more often than would be expected. High win- garners a wrestler approximately 11 spots in the ning percentages by themselves, however, are ranking, or roughly four times the value of the 4 An earlier version of this paper, Duggan and Levitt (2001), derive a formal model of the incentives facing partic- 2 Nevertheless, in recent years, sumo wrestling has been ipants. For wrestlers on the bubble, the incentive to rig matches dogged by allegations of rigged matches, none of which increases monotonically over the course of a tournament. have been substantiated. Officials from the Japanese Sumo 5 Wrestlers ranked between fifth and tenth earn an annual Association dismiss these complaints as fabrications on the income—including only official wages, bonuses, and prize part of disgraced former wrestlers. Ultimately, despite years money—of roughly $250,000 per year. The fortieth-ranked of allegations, no formal disciplinary actions have been wrestler earns approximately $170,000.