Study: Trading up in the draft is a sucker's bet

[Skyy God]

I'm crediting blind luck rather than Pioli's savvy for the success of the Baldwin/Houston trade.

Today the Philadelphia Inquirer profiles Cade Massey, a professor at Penn's Wharton School of business. Already with a study under his belt arguing that the conventional wisdom of the Draft Value Chart is all wrong, Massey was contracted by an unnamed NFL team to study the history of the draft for market inequalities. He discovered something that won't come as a surprise to football fans: the draft is kind of a crap shoot.

There is skill in making individual picks, Massey says, but the fact that draft success isn't sustainable points to the conclusion that every team is fairly evenly matched. What seem to be indicators that drafting is a talent, like the Lions' drought or the Patriots' boom of a decade or so ago, are statistically expected aberrations.

"Some teams have great years, other teams have bad years - and it matters," Massey said. "But those differences aren't persistent year-to-year, which tells me that they are chance driven. Something between 95 and 100 percent - I'm not exaggerating - of team differences in the draft is driven by chance."

If you take issue with that, you'll have to math it out with the math guy; I'm just passing things along. But Massey's field of study seems perfectly designed to tackle the NFL draft— according to his site, his expertise in psychology and economics hones in on "judgment under uncertainty, with a focus on optimism, overconfidence, and learning."

Last year, he co-authored a study with the University of Chicago's Richard Thaler. Entitled "Loser's Curse: Overconfidence vs. Market Efficiency in the NFL Draft," it aimed to determine whether there are any patterns in how front offices value draft picks, and if those patterns expose an opportunity for greater value.

The study is embedded below, but here's a talking point: teams overvalue higher picks in part because they overvalue their own judgment in evaluating players, and that "overconfidence is exacerbated by information." The more front offices know about a prospect, the more they think they know, and they also assume other teams value that prospect as highly, creating a feedback loop that pushes players higher up the draft board than they may deserve.

In terms of practical takeaways, the study says to toss out that hoary chestnut, the Draft Value Chart. You know the one: teams have consulted it for decades to put a rough value on any trade including multiple picks. (Example: the second overall pick would be exactly equal to a sixth and a 16th.)

Massey says the chart is wrong, because it doesn't take into account salaries in a salary cap league. His study looks at "surplus value," or what a player actually gives you compared to what would be expected for his contract worth. Because rookie contracts keep salaries artificially low, the surplus values of draft picks are nearly always positive. But some are more valuable than others.

That treasured first pick in the draft is, according to this analysis, actually the least valuable pick in the first round! To be clear, the player taken with the first pick does have the highest expected performance, but he also has the highest salary, and in terms of performance per dollar, is less valuable than most players taken in the second round.
Here's the chart showing the surplus value of picks from drafts between 1994-2008 (when, it must be noted, the lack of a draft slotting system severely inflated the top picks' contracts). According to the research, teams gained more value from drafting late in the first round than they did early in the first.

Massey and Thaler have advice for GMs: only suckers trade up. Over those 14 years of drafts, they calculated the outcomes of every possible 2-for-1 trade for a first rounder using the Draft Value Chart, and found "overwhelming evidence that a team would do better in the draft by trading down." The team that would have traded down would have gained an average of 5.4 man-starts per season, with roughly the same amount of Pro Bowl appearances, at a cheaper cost.

The study was naturally controversial, in part due to misreadings. It deals only in probabilities, not in individual picks. If you trade up and land a player who turns out to be a superstar, it was a good trade. The study merely says that in most cases, that possibility doesn't justify the risk.

It also has little chance of making an impact in actual front office behavior, because of the very psychological barriers it cites. In terms of "impact"—tickets sold, media coverage garnered, general excitement—a top pick is always going to be desirable. Even more important is the corollary: the fear of missing out on a superstar. That's the kind of thing that costs GMs their jobs, and leads to moves that look sexy in the short term but don't work out over time.

http://deadspin.com/study-nfl-teams-...the-1378701238

[patteeu]

Originally Posted by Tombstone RJ

hmm... well if it was luck then Polian would have flipped a coin, head's it's Manning, tails it's Leaf and the coin would have landed on heads, right?

No, that's not right at all. That's what I've been trying to get through to you. The fact that Polian believed he was picking Manning for all the right reasons doesn't mean he wasn't lucky. How many times has he made a pick believing that he was picking the right guy for the right reasons only to be wrong?

[Tombstone RJ]

Originally Posted by patteeu

No, that's not right at all. That's what I've been trying to get through to you. The fact that Polian believed he was picking Manning for all the right reasons doesn't mean he wasn't lucky. How many times has he made a pick believing that he was picking the right guy for the right reasons only to be wrong?

I don't know how many times Polian has made a pick KNOWING it was going to be successful but using the Manning example is just wrong. Certainly when you have the #1 pick you do a hellova lot of research before you go to the podium. Polian scrutinized the hell out of Manning and much of that was due to the fact that Leaf was sitting there too. I will say this again because it doesn't appear to have sunk in with you. Polian could have very well OPTED for Manning knowing full well that he might be wrong and that Leaf might end up being better. That's not luck, that's taking the guy you want regardless of what others think.

[patteeu]

Originally Posted by Tombstone RJ

I don't know how many times Polian has made a pick KNOWING it was going to be successful but using the Manning example is just wrong. Certainly when you have the #1 pick you do a hellova lot of research before you go to the podium. Polian scrutinized the hell out of Manning and much of that was due to the fact that Leaf was sitting there too. I will say this again because it doesn't appear to have sunk in with you. Polian could have very well OPTED for Manning knowing full well that he might be wrong and that Leaf might end up being better. That's not luck, that's taking the guy you want regardless of what others think.

[Tombstone RJ]

Originally Posted by patteeu

this ain't hard to understand.

[HoneyBadger]

Originally Posted by Tombstone RJ

I don't know how many times Polian has made a pick KNOWING it was going to be successful but using the Manning example is just wrong. Certainly when you have the #1 pick you do a hellova lot of research before you go to the podium. Polian scrutinized the hell out of Manning and much of that was due to the fact that Leaf was sitting there too. I will say this again because it doesn't appear to have sunk in with you. Polian could have very well OPTED for Manning knowing full well that he might be wrong and that Leaf might end up being better. That's not luck, that's taking the guy you want regardless of what others think.

No. Time and time again the draft has shown to be a great unknown.

[Tombstone RJ]

Originally Posted by HoneyBadger

No. Time and time again the draft has shown to be a great unknown.

Yes and no. Drafting Andrew Luck #1 was not a real hard choice.

[Consistent1]

Originally Posted by Cochise

There's not as much distance between the #1 and #10 overall picks as there used to be.

If you look at all the #1 overall picks back to the last one that is still active, Manning...

2012 Andrew Luck
2011 Cam Newton
2010 Sam Bradford
2009 Matthew Stafford
2008 Jake Long
2007 JaMarcus Russell
2006 Mario Williams
2005 Alex Smith
2004 Eli Manning
2003 Carson Palmer
2002 David Carr
2001 Michael Vick
2000 Courtney Brown
1999 Tim Couch
1998 Peyton Manning

For the most part, you have "consensus" #1s at the time they were drafted.

Excepting Andrew Luck (too soon to judge), how many of these guys were worth a #1?

Mario Williams is probably the most recent one who delivered on #1-type potential. Eli Manning did, and Peyton Manning did.

That's really it.

I can't agree with this logic. If you are sitting at 9, and need a guy like Luck, you have to give up that 9 and other picks to get him.

[Valiant]

sky is blue..

Just like fantasy, it is a crapshoot. You are going for the guys you want.. If someone picks somebody stupid like the Raiders, or someone does a trade it messes up your board even more.. Then you are trying to tell me that trading multiple players for one player had a chance to have more games played? well err duh..

I cannot believe people pay for this, shit it is like this company my friend wants to start. he told me the premise, common sense is all you need. Made a profit a the first month.