On one end of the spectrum, you have a 100% direct elimination system. No cheating there (you lose, you're out) but you don't get a good feel for who is really the best since so few games are happening (log2(n)). Somebody can win just because they had an easy draw, even when you try to be smart with how you pepper seeds.
On the other end of the spectrum, you can do a 100% pool system: everybody plays against everybody else. The winner is very likely to be the best of all, but it's obviously an organizational nightmare that would take forever to complete (n! games). Again, here, there is zero incentive to lose.
This is why most professional tournaments operate with a mix of these two: a set of small pools first that leads into a direct elimination system. The trick is to implement the transition so that you always want to win all your pool games. Seeds are supposed to take care of this problem, but it's not a guarantee.