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Ilov80s

The Loser's Curse

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INteresting study (by reading the abstract and intro). Partially supports the fact that good teams are good because they are good talent evaluators. Losing teams get stuck in a cycle (paying a high price for a player, not getting "surplus" or equivalent value from the pick, sucking up large amounts of cap space, etc.).

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INteresting study (by reading the abstract and intro). Partially supports the fact that good teams are good because they are good talent evaluators. Losing teams get stuck in a cycle (paying a high price for a player, not getting "surplus" or equivalent value from the pick, sucking up large amounts of cap space, etc.).

 

 

The real conclusions concering the NFL draft that it draws are this:

 

- the $ compensation curve is steeper then the player production curve. Players on the top of the draft are making money that is not justified by actual field performance.

 

- a team gets more value out of late first round picks then early first round picks. When looking at the performance difference between individual positions, there is approximately a 52% chance that the first player taken will outperform the second player taken and the average distance between picks of the same position is 8 spots. The money saved in 8 spots in gigantic compared to the minimal loss in likely performance.

 

- Teams have too much confidence in their ability to pick the best players. Its really just a huge lotto. If you were to play the lotto would you rather pay a lot of money to have one ticket with the numbers of your choice or would you rather pay less for 2 tickets with the numbers that were left over? If its all pretty random, why wouldn't you pay less for two?

 

- Also teams greatly undervalue future draft picks. I believe they sell them at nearly half the value.

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