Today's WSJ has a good story on issues with the design of the NFL draft -- good, with the exception of the silly title, "The NFL Draft Drives Economists Crazy." The title is off base because oddball problems like the NFL Draft are the puzzles upon which we economists thrive!
Three researchers at Harvard Business School—who studied under Alvin Roth, a Harvard professor and a pioneer in market-design theory—have proposed an alternative to the NFL draft.
Under their plan, all 32 teams would be given seven picks. They would have to abide by a spending cap that would go higher to lower—with the worst team (based on its record the previous season) having the most money to spend. When the bidding opened, the most sought-after players would draw multiple bids. Teams could then raise their bid as high as they'd like for a player they coveted.
Theoretically, a team could get any player it wanted—so long as it was prepared to pinch pennies on everyone else. Meanwhile, a team that didn't want to break the bank on any particular player could pick up lots of useful parts by spreading its money around evenly. Teams could also thrive by focusing on the bidding and looking for bargains.
"I think that it would significantly help teams get the right guys," said Lucas Coffman, one of the study's authors. If nothing else, Mr. Coffman said, the auction format might be more exciting than the draft, which allows for long gaps between picks.
This is an intriguing idea, and surely worth some thought. The proposal's inverse relation between team success and draft spending probably codifies what happens with the current draft structure (and is an oddity of N. American sports). I like the idea of uncoupling draft order and selection, in principle, and wonder about the impact on pre- and post-draft trading of picks and players.