File Location
All you need to do is to edit the conversation.txt file that is located in:
For the native game: C:\Program Files (x86)\Steam\steamapps\common\MountBlade Warband\Modules\Native
For other module: same Modules folder, but different subfolder
For other module that was installed through Steam Workshop: the respective subfolder in C:\Program Files (x86)\Steam\steamapps\workshop\content\48700
The Required Segments
Once you have located this text file, back it up by saving a copy and then edit following segments in a text editor (Notepad, Notepad++, etc.):
The first and the second image show the segments that are responsible for the conversation with the arena master.
The first image represents the rewards that he will mention, when you talk with him for the first time.
The second image represents the rewards that he will mention, when you ask about the rewards again.
The third image represents the ACTUAL rewards after the fights AND the rewards that he will mention. If you care only about the actual rewards, but don't care that the dialogue lines are correct, you can edit only the segments from the third image.
The red underlined text represents the keywords that you can search for (Ctrl+F) to locate the required segments.
The blue underlined text represents the knockout count.
The yellow highlighted text represents the reward values that you want to edit.
The question marks PROBABLY represent the reward values that you should edit, but I'm not sure, if they actually do. I edited them anyway and nothing bad happened and I got the result that I wanted.
Alternative Method
Alternatively, you can download a mod from the Workshop called Vanilla Surprise for Warband 1.174. It changes the native game slightly and the arena rewards are following: 500 for 3 knockouts, 1000 for 6 knockouts, 2500 for 10 knockouts, 6000 for 20 knockouts and 8500 for being the last participant standing.
Vanilla Surprise for Warband 1.174
The problem with this method is that you can't set your own reward values and you can't use this mod with other mods (at least not in a straightforward way).
Credit And Further Reading
The original credit goes to TaleWorlds forum user TheMageLord. He described the trick, but was not specific enough about distinguishing the values from other numbers and the values that actually change the rewards were in another location.
If you want to learn more about Warband text file tweaking, check out this thread:
Compilation of 82 little tweaks to the text files to change your gameplay[forums.taleworlds.com]
Source: https://steamcommunity.com/sharedfiles/filedetails/?id=1963990362
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