Winning Isn’t Everything: Corruption in Sumo Wrestling

ARK

UGGAN AND

TEVEN

D. L

EVITT

There is a growing appreciation among econ-omists of the need to better understand the rolethat corruption plays in real-world economies.Although some have argued that it can be wel-fare enhancing (Nathaniel Leff, 1964), mostcommentators believe that a willingness to ac-cept bribes (or similar forms of corruption) ineither the public or the private sector reduceseconomic efciency (Andrei Shleifer andRobert W. Vishny, 1993). As a result, govern-ments and rms often create incentives to mo-tivate their employees to be honest (Gary S.Becker and George J. Stigler, 1974).While it is generally agreed that corruption iswidespread, there is little rigorous empiricalresearch on the subject. Because of corruption’sillicit nature, those who engage in corruptionattempt not to leave a trail. As a consequence,much of the existing evidence on corruption isanecdotal in nature. More systematic empiricalsubstantiationof corrupt practices is unlikely toappear in typical data sources. Rather, research-ers must adopt nonstandard approaches in anattempt to ferret out indirect evidence of corruption.To date, there have been only a handful of studies that attempt to systematically documentthe impact of corruption on economic out-comes. The rst empirical study of corruptiondates to 1846 when Quetelet documented thatthe height distribution among French malesbased on measurements taken at conscriptionwas normally distributed except for a puzzlingshortage of men measuring 1.57–1.597 meters(roughly 5 feet 2 inches to 5 feet 3 inches) andan excess number of men below 1.57 meters.Not coincidentally, the minimum height forconscription into the Imperial army was 1.57meters (Stephen Stigler, 1986).More recent em-pirical work on corruption includes Robert H.Porter and J. Douglas Zona (1993), which ndsevidence that construction companies colludewhen bidding for state highway contracts bymeeting before the auction, designating a seri-ous bidder, and having other cartel memberssubmit correspondingly higher bids. R. PrestonMcAfee (1992) details a wide variety of bid-rigging schemes. Paulo Mauro (1995) uses sub- jective indices of corruption across countries todemonstrate a correlation between corrupt gov-ernments and lower rates of economic growth,although the relationship may not be causal.Ray Fisman (2001) analyzes how stock pricesof Indonesian rms uctuate with changes informer Prime Minister Suharto’s health status.Firms with close connections to Suharto, whichpresumably benet from corruption within theregime, decline substantially more than otherIndonesian rms when Suharto’s health weak-ens. Whetherthe rents accruingto those close toSuharto are due to corruption or simply badpolicy,however, is hard to determine.Rafael DiTella and Ernesto Schargrodsky (2000) docu-ment that the prices paid for basic inputs atpublic hospitals in Buenos Aires fall by 10–20percent after a corruption crackdown.In this paper we look for corruption amongJapan’s elite sumo wrestlers. While acknowl-edging that sumo wrestling is not itselfa subjectof direct interest to economists, we believe thatthis case study nonetheless provides potentiallyvaluable insights. First, if corrupt practicesthrive here, one might suspect that no institutionis safe. Sumo wrestling is the national sport of Japan, with a 2,000-year tradition and a focuson honor, ritual, and history that may be unpar-alleled in athletics.

Moreover, Japan is generally

* Duggan:Department of Economics, University of Chi-cago, 1126 East 59th Street, Chicago, IL 60637,and NationalBureau of Economic Research (e-mail: mduggan@midway.uchicago.edu); Levitt: American Bar Foundation and De-partment of Economics, University of Chicago, 1126 East59th Street, Chicago, IL 60637 (e-mail: slevitt@midway.uchicago.edu).We would like to thank Gary Becker, CaseyMulligan,Andrei Shleifer, Stephen Stigler, Mark West, twoanonymous referees, seminar participants, and especiallySerguey Braguinsky for helpful comments. Kyung-HongPark provided truly outstanding research assistance. Levittgratefully acknowledges the research support of the Na-tional Science Foundation and Sloan Foundation.

See Mark West (1997) for an examination of the legalrules and informal normsthat governsumo wrestling in Japan.

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found to have relatively low rates of corruptionin cross-country comparisons(Transparency In-ternational,2000).

Second, because of the sim-plicity of the institutionalframework, it is easyto understand and model the incentives facingparticipants. Third, data to test for match rig-ging are readily available. While the exact tech-niques we utilize for studying corrupt behaviorin sumo wrestling will require modication be-fore being applied to more substantive applica-tions, our analysis may nonetheless aid futureresearchers in that task.The key institutional feature of sumo wres-tling that makes it ripe for corruption is theexistence of a sharp nonlinearity in the payoff function for competitors. A sumo tournament(

basho

) involves 66 wrestlers (

rikishi

) partici-pating in 15 bouts each. A wrestler whoachieves a winning record (eight wins or more,known as

kachi-koshi

) is guaranteed to rise upthe ofcial ranking (

banzuke

); a wrestler with alosing record (

make-koshi

) falls in the rankings.A wrestler’s rank is a source of prestige, thebasis for salary determination, and also inu-ences the perks that he enjoys.

Figure 1 demonstrates empirically the impor-tance of an eighth win to a wrestler. The hori-zontal axis of the gure is the number of wins awrestler achieves in a tournament; the verticalaxis is the average change in rank as a conse-quenceof the tournament.The changein rank isa positive function of the number of wins. Withthe exception of the eighth win, the relationshipis nearly linear: each additionalvictory is worthapproximately three spots in the rankings. Thecritical eighth win—which results in a substan-tial promotion in rank rather than a demotion—garners a wrestler approximately11 spots in theranking, or roughly four times the value of thetypical victory. Consequently, a wrestler enter-ing the nal match of a tournament with a 7-7record has far more to gain from a victory thanan opponent with a record of, say, 8-6 has tolose. There will also be incentives for forward-looking wrestlers to rig matches on earlier daysof the tournament.

According to our roughcalculations, moving up a single spot in therankings is worth on average approximately$3,000 a year to a wrestler, so the potentialgains to trade may be substantialif the wrestlersx a match.

Of course, no legally bindingcontract can be written.In this paper, we examinemore than a decadeof data for Japan’s sumo elite in search of evidence demonstrating or refuting claims of match rigging. We uncover overwhelming evi-dence that match riggingoccursin the nal daysof sumo tournaments. Wrestlers who are on themargin for attaining their eighth victory win farmore often than would be expected. High win-ning percentages by themselves, however, are

Nevertheless, in recent years, sumo wrestling has beendogged by allegations of rigged matches, none of whichhave been substantiated. Ofcials from the Japanese SumoAssociation dismiss these complaints as fabrications on thepart of disgraced former wrestlers. Ultimately, despite yearsof allegations, no formal disciplinary actions have beentaken towards any wrestler.

For instance, the lowest-ranked wrestlers in the

heya

must rise early each morning to clean the building andprepare the food for the main meal of the day. When awrestler reaches the rank of

juryo,

placing him among thetop 66 sumo wrestlers in Japan, he no longer is required todo chores for other

rikishi.

Those in the top 40 with ranks of

maegashira

or better have their own servants.

An earlier version of this paper, Duggan and Levitt(2001), derive a formal model of the incentives facing partic-ipants.Forwrestlers on the bubble,theincentivetorigmatchesincreases monotonically over the course of a tournament.

Wrestlers ranked between fth and tenth earn an annualincome—including only ofcial wages, bonuses, and prizemoney—of roughly$250,000per year. The fortieth-rankedwrestler earns approximately $170,000. The seventieth-ranked wrestler receives only about $15,000 per year (noofcial salary, just a small stipend to cover tournamentexpenses, some prize money, and room and board). Allinformation on annual salaries are based on the authors’calculations and information provided in Mina Hall (1997).Unofcial sources of income such as endorsements wouldlikely increase the disparity between the top and bottomwrestlers.F

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1595VOL. 92 NO. 5 DUGGAN AND LEVITT: CORRUPTION IN SUMO WRESTLING

far from conclusive proof of match rigging.Those wrestlers who are on the margin forachieving the eighth win may exert greater ef-fort because their reward for winning is larger.We offer a numberof pieces of evidenceagainstthis alternative hypothesis. First, whereas thewrestler who is on the margin for an eighth winis victoriouswith a surprisinglyhigh frequency,the next time that those same two wrestlers faceeach other, it is the

opponent

who has an un-usually high win percentage.

This result sug-gests that at least part of the currency used inmatch rigging is promises of throwing futurematches in return for taking a fall today. Sec-ond, win rates for wrestlers on the bubble varyin accordance with factors predicted by theoryto support implicit collusion. For example, suc-cess rates for wrestlers on the bubble risethroughout the career (consistent with the de-velopmentof reputation),but fall in the last yearof a wrestler’s career. Third, match rigging dis-appears during times of increased media scru-tiny. Fourth, some wrestling stables (known as

heya

) appear to have worked out reciprocityagreements with other stables such that wres-tlers from either stable do exceptionallywell onthe bubble against one another.

Finally, wres-tlers identied as “not corrupt” by two formersumo wrestlers who have alleged match riggingdo no better in matches on the bubble than intypicalmatches,whereas those accused of beingcorrupt are extremely successful on the bubble.It is difcult to reconcile any of these ndingswith effort as the primary explanation.The remainder of this paper is organized asfollows. Section I introduces the data used inthe analysisand presents the empiricalevidencedocumenting the strong performance of wres-tlers on the bubble. Section II attempts to dis-tinguish between increased effort and matchrigging as an explanation for the observed pat-terns in the data and also considers the way inwhich the market for rigged matches operates,e.g., how contracts are enforced, the use of cashpayments versus promises of future thrownmatches, and individuals versus stables as thelevel at which deals are brokered. Section IIIconcludes with a discussion of the broader eco-nomic implications of our analysis.

I. Evidence of Strong Performanceon the Bubble

Our data set consists of almost every ofcialsumo match that took place in the top rank (

Sekitori

) of Japanese sumo wrestling betweenJanuary 1989 and January 2000. Six tourna-ments are held a year, with nearly 70 wrestlersper tournament, and 15 bouts per wrestler.Thus, our initial data set consists of over 64,000wrestler-matches representing over 32,000 totalbouts (since there are two wrestlers per bout). Asmall number of observations (less than 5 per-cent of the total data set) are discarded due tomissing data, coding errors, or early withdrawalfrom the tournament due to injury. A total of 281 wrestlers appear in our data, with the aver-age number of observations per wrestler in arandomly selected match equal to 554, and amaximum of 990. The average number of totalmatches between the same two wrestlers com-peting in a randomly selected match is 10; thuswe often have many observations involving thesame two wrestlers at different points in time.For each observation,we know the identityof the two competitors, who wins, the month andyear of the tournament,and the day of the match(tournaments last 15 days with one match perwrestler per day). For roughly 98 percent of thesample, we also know what wrestling stable thewrestlers belong to; information is missing forsome wrestlers in the early part of our samplewho had only a short stint in the top ranks.We begin by looking at the distribution of wins across wrestlers at the end of tournaments.We expect that a disproportionate number of wrestlers should nish with eight wins becauseof the high payoff associated with the eighthwin (see Figure 1). To the extent that wrestlersare rigging matches not only on the nal day,but also in the days immediately preceding theend of the tournament, extra weight should alsobe observed on nine wins, as wrestlers who areclose to the margin on days 13 or 14 may buywins that ultimately were not needed to reacheight wins due to subsequent victories. Figure2 presents a histogram of nal wins for the60,000 wrestler-tournament observations inwhich a wrestler completes exactly 15 matches.For purposes of comparison,we also present the

By the second subsequent meeting, the winning per-centages revert back to the expected levels, suggesting thatdeals between individual wrestlers span only two matches.

Wrestlers in the same stable do not wrestle each other.