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Are there too few trades during the NFL draft?

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  • Philip L. Hersch
  • Jodi E. Pelkowski

Abstract

College football players are initially assigned to teams in the National Football League (NFL) through the league’s draft selection process. At each team’s turn to pick, the team has the option of exercising the pick itself or trading it to another team. If gains from trade are exhausted, draft picks should be exercised by the team with the highest expected value. That is, the expected player contribution garnered from a given pick should not be dependent on whether the pick was traded or retained. Regression results, however, indicate that controlling for a player’s draft position, when a team trades up to acquire a player, that player is more likely to have greater on-field success. This suggests that there are too few draft day trades. Plausible reasons are high transaction costs or the fear of media scrutiny that draft trades can engender.

Suggested Citation

  • Philip L. Hersch & Jodi E. Pelkowski, 2016. "Are there too few trades during the NFL draft?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(7), pages 516-519, May.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:7:p:516-519
    DOI: 10.1080/13504851.2015.1085629
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    References listed on IDEAS

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    1. Michael Conlin & Patrick M. Emerson, 2006. "Discrimination in Hiring Versus Retention and Promotion: An Empirical Analysis of Within-Firm Treatment of Players in the NFL," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 115-136, April.
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    3. Cade Massey & Richard H. Thaler, 2013. "The Loser's Curse: Decision Making and Market Efficiency in the National Football League Draft," Management Science, INFORMS, vol. 59(7), pages 1479-1495, July.
    4. Kendall Weir & Stephen Wu, 2014. "Criminal Records and the Labor Market for Professional Athletes," Journal of Sports Economics, , vol. 15(6), pages 617-635, December.
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    Cited by:

    1. Jemuel Chandrakumaran, 2021. "The AFL Pick Trading Market as a Coasian Utopia," Journal of Sports Economics, , vol. 22(1), pages 75-84, January.

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