I don't expect many BBI'ers to read the paper. I post it because it touches on many topics routinely discussed on BBI leading up to the draft.
This is some heady reading that reaches interesting conclusions. This is a Wharton Faculty research paper and therefore it is not for everyone.
An exerpt below:
Decision Making and Market Efficiency in the National Football League Draft: University of Pennsylvania, Wharton Research
Every year the NFL holds a draft in which teams take turns selecting players. A team that uses an early draft pick to select a player is implicitly forecasting that this player will do well. Of special interest to an economic analysis is that teams often trade picks. For example, a team might give up the 4th pick and get the 12th pick and the 31st pick in return. In aggregate, such trades reveal the market value of draft picks.
Although it is not immediately obvious what the rate of exchange should be for such picks, a consensus has emerged over time that is highly regular. One reason for this regularity is that a price list, known in the league circles as The Chart, has emerged and teams now routinely refer to The Chart when bargaining for picks. What our analysis shows is that while this chart is widely used, it has the “wrong” prices. That is, the prices on the chart to do not correspond to the correct relative value of the players. We are able to say this because player performance is observable...
Decision making and market efficiency in the NFL Draft - (
New Window )
Thaler and Massey discovered that, despite the time and money that football teams devoted to studying players, the teams weren’t very good at predicting who would be the best. Those chosen early often had less impressive careers than those chosen later. The chance that a player at a given position turns out to be better than the next player drafted at that same position is only 52 percent, not much better than a coin flip.
“Even the smartest guys in the world, the guys who spend hours with game film, can’t predict this with much success,” Massey has told me. “There’s no crime in that. The crime is thinking you can predict it.”
The savviest teams have realized they can exploit this irrationality by trading one of their high picks for multiple picks lower down. They effectively swap the ability to choose the one player they want for the ability to take chances on multiple players. They embrace humility. The Dallas Cowboys built a championship team in the 1990s with this approach, and the New England Patriots have done so over the past two decades.
I personally look at the draft as a scratch off lottery where you need to accumulate $X in order to turn a profit. No single pick is guaranteed to reach that amount you need to make a profit, but the higher draft pick is more likely to have some money.
Further exacerbating the "trade down" craze are simulators like first-pick.com that severely overestimate the desire and value of a trade down. If you wanted to you could run a mock and end up with 20 picks. Not only is that ridiculous, but as Dave Gettleman rightly said, you end up taking players you are just going to cut.
I personally look at the draft as a scratch off lottery where you need to accumulate $X in order to turn a profit. No single pick is guaranteed to reach that amount you need to make a profit, but the higher draft pick is more likely to have some money.
Further exacerbating the "trade down" craze are simulators like first-pick.com that severely overestimate the desire and value of a trade down. If you wanted to you could run a mock and end up with 20 picks. Not only is that ridiculous, but as Dave Gettleman rightly said, you end up taking players you are just going to cut.
Mike, the post above was a cut and paste from the article that attached the document. I apologize for not making that clear. It is for discussion purposes and was not a conclusion that I came to.
Thaler and Massey discovered that, despite the time and money that football teams devoted to studying players, the teams weren’t very good at predicting who would be the best. Those chosen early often had less impressive careers than those chosen later. The chance that a player at a given position turns out to be better than the next player drafted at that same position is only 52 percent, not much better than a coin flip.
“Even the smartest guys in the world, the guys who spend hours with game film, can’t predict this with much success,” Massey has told me. “There’s no crime in that. The crime is thinking you can predict it.”
The savviest teams have realized they can exploit this irrationality by trading one of their high picks for multiple picks lower down. They effectively swap the ability to choose the one player they want for the ability to take chances on multiple players. They embrace humility. The Dallas Cowboys built a championship team in the 1990s with this approach, and the New England Patriots have done so over the past two decades.
What this doesn't account for is that impact players are more likely to be found at the top end of the draft. Even if the odds are not that much greater, you do have better odds of getting that all pro talent in the top 10 compared to the bottom 10.
It's a good take though, but we shouldn't gloss over how vital it is to a franchise to find that GREAT player.
Quote:
And other teams have been burned by trading down, stockpiling picks, and passing on 1 player who turns out to exceed draft position for multiple who never add up to be the same. Since the Dallas Cowboys were mentioned, I believe that there was one draft that they traded down so much that they had about a dozen picks from Round 3 on but none in the first two rounds. None of the players selected ended up being good enough to justify offering second contracts to.
I personally look at the draft as a scratch off lottery where you need to accumulate $X in order to turn a profit. No single pick is guaranteed to reach that amount you need to make a profit, but the higher draft pick is more likely to have some money.
Further exacerbating the "trade down" craze are simulators like first-pick.com that severely overestimate the desire and value of a trade down. If you wanted to you could run a mock and end up with 20 picks. Not only is that ridiculous, but as Dave Gettleman rightly said, you end up taking players you are just going to cut.
Mike, the post above was a cut and paste from the article that attached the document. I apologize for not making that clear. It is for discussion purposes and was not a conclusion that I came to.
I understood that it came from the paper and was not your commentary. I just disagree with the authors' conclusions because of the methodology used and offering my view on a better analogy for looking at the NFL Draft and trading down.
But BB has never done that well in the draft....and Jimmy Johnson didn't necessary use that strategy beyond one trade
It’s like they completely miss the entire point of team building.
Obviously what he is doing is working for him.
(2) He is a great judge of the worth of established talent and ways they can be put to the greatest advantage. He has been willing to cut bait with players and bring on players from elsewhere without too much concern about feelings.
His drafts have been OK, but not extraordinarily great.
Richard Thaler was my professor at UofC - he switched to Wharton?
The Twenty Percent Failure Factor
If a personnel department is doing an outstanding job of evaluating and acquiring talent through the draft and free agency, its failure rate (i.e., the number of players who don't "pan out" for whatever reason) can be expected to be around twenty percent. In other words, regardless of how capable and efficient your scouts and coaches are in identifying, researching and projecting the potential value of a particular player, a fall out of approximately twenty percent will occur.
Over the years, every team in the NFL has experienced some degree of disappointment in its acquisitions. Top draft choices have turned out to be "busts," and expensive free agent signings have not lived up to their expectations.
The point to be emphasized is that no matter how much time and effort a team puts into the acquisitions process (i.e., no matter how thoroughly a team "studies" a given athlete), some miscalculations will happen. The process simply involves too many variables to be able to accurately account for every factor.
On the other hand, if the percentage of a team's acquisitions failures climbs to over twenty percent, then shortcomings exist in the team's system of evaluating and acquiring players. If disappointment after disappointment occurs, they can't all be related to "bad luck."
All factors considered, a failure rate of approximately twenty percent in this regard is about all a franchise can absorb and continue to be competitive. Capable, experienced management will have a firm grasp of this reality.
Quote:
This is a Wharton Faculty research paper
Richard Thaler was my professor at UofC - he switched to Wharton?
Herman,
This from the Title Page of linked document:
The Loser's Curse: Decision Making and Market
Efficiency in the National Football League Draft
Cade Massey
University of Pennsylvania
Richard H. Thaler
Quote:
Quote:
This is a Wharton Faculty research paper
Richard Thaler was my professor at UofC - he switched to Wharton?
Herman,
This from the Title Page of linked document:
The Loser's Curse: Decision Making and Market
Efficiency in the National Football League Draft
Cade Massey
University of Pennsylvania
Richard H. Thaler
Got it. Looks like he was a co-author. Thanks.
Its also interesting to consider what affect being drafted early "unfairly" gives you more a chance to start and stay on the team - Sinorice Moss and JPP of TE comes to mind.