Ilov80s 0 Posted March 23, 2006 The Loser's Curse: Overconfidence vs Market Efficiency in the NFL Draft From the School of Business at Duke University Share this post Link to post Share on other sites
veebs4 2 Posted March 23, 2006 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.). Share this post Link to post Share on other sites
SmartassBoiler 0 Posted March 23, 2006 Duke knows all about market efficiency...just ask the refs. Share this post Link to post Share on other sites
Ilov80s 0 Posted March 24, 2006 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. Share this post Link to post Share on other sites
cinciman7 2 Posted March 24, 2006 Duke knows all about market efficiency...just ask the refs. Ask the refs today Share this post Link to post Share on other sites