NFL draft

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Gregg Easterbrook’s Mock of NFL Mock Drafts is out. The Patriots take Cade Massey in the first round but pass on Thaler. Thaler spends the rest of his career determined to prove Bill Belichick wrong.

17. New England Patriots (from Oakland). Cade Massey, behavioral economist, Yale University:

In recent drafts, New England has made six first-round trade-downs. The Flying Elvii are following the Massey-Thaler prescription. These academic economists contend that low draft picks actually are worth more than high picks, because the odds of finding a good player are the same, but the signing-bonus expense declines. Bill Belichick is the sole NFL draft-master to have taken the economists’ advice. The Patriots also hope to tab University of Chicago economist Richard Thaler, but only after repeatedly trading down to get Thaler cheaply.

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Assorted links

1) Would you shop more in your hometown if it had a rewards program?

2) Why a proposed rookie wage scale emerges from the lessons of Thaler and Massey’s research on the NFL draft.

3) Why Swipegood won’t lead to more charitable giving.

4) A No-Lose lottery now in Alabama.

5) Choice architecture in the wild: Mobile phone edition.

6) An entry in a $25 lottery or $.05 off every trip if you bring your own bag. Which one works better? Hat tip: Rags Srinivasan.

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The Eagles and the Patriots have taken Richard Thaler’s analysis of the NFL draft seriously, say Tobias J. Moskowitz and L. Jon Wertheim.

Over the last decade, two teams in particular created a new model, placing less value on the top picks: the Patriots and the Eagles. Not surprisingly, they have two of the top winning percentages and five Super Bowl appearances since 2000. Tom Brady, one of the few quarterbacks hailed as Manning’s equal? He was drafted in the sixth round of the 2000 draft, with the 199th pick, and thus was obtained cheaply, leaving the Patriots with extra cash for other talent to surround him. Teams that traded draft picks for future ones benefited in subsequent years, too — and again, the Patriots and Eagles were at the forefront. (Not coincidentally, their coaches, Andy Reid and Bill Belichick, have enough job security to afford the luxury of a long-term focus. Reid even has the additional title of executive vice president of football operations.)

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“The logic for the really bad teams to trade down is really compelling because they have so many needs,” Thaler said. “If I were the owner of the Rams, there’s no way I would be taking (Oklahoma) quarterback Sam) Bradford…If I owned a team and I had that pick, I would be peddling it like crazy….Until they change the rookie salary scale. It’s wildly overvalued.”

Full story here.

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In his Economic View column:

How confident should a team be that this early pick is better? Suppose we rank all the players at a given position — running back, linebacker, etc. — in the order they were picked in the draft, then compare any two in consecutive order on the list. What do you think is the chance that the player picked higher will turn out to be better — as judged, say, by number of games started in his first five years in the league?

If teams knew nothing, the answer would be 50 percent, as it would be for flipping a coin. If they had perfect knowledge, the answer would be 100 percent. Go ahead, make your guess.

The answer is 52 percent — an outcome that is barely better than that of a coin flip. This means that although the value of players declines throughout the draft, quality declines more slowly than compensation — players picked early are very highly paid. As a result, the first pick in the draft has often provided less value to his team, in performance per dollar, than the last pick in the first round (the one awarded to the Super Bowl winner). In other words, in the world of the N.F.L. draft, the rich get richer.

NFL teams have been using something called the Chart to help them decide how much one pick is worth versus another. Given how poorly the Chart actually measures pick value, you’d think someone creative at an NFL team would have devised a new one based on this research.

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Economist Kevin Hassett has taken to assessing NFL teams’ draft choices based on the Thaler-Massey strategy, which emphasizes a player’s value (based on performance and salary).

Hassett identifies four winners: New England Patriots, Denver Broncos, Detroit Lions Lions, and New York Giants.

New England’s coach, Bill Belichick,…ditched his first-round pick altogether and loaded up on four second-rounders. In addition, he traded some of his later picks for other teams’ second-round picks next year. The big news is that the Giants maneuvered to get two second-round and two third-round picks, elevating their final scores.

The big losers were the Washington Redskins, the New York Jets, and the San Francisco 49ers.

The Redskins once again revealed their extreme economic ignorance, trading away their second-round and fourth-round picks…The Jets made a classic error, falling in love with University of Southern California quarterback Mark Sanchez and virtually guaranteeing they will have a large number of undrafted scrubs on their roster. Given the high salaries at the top of the draft, Sanchez will probably not generate much value above that demanded by his salary, even if he becomes a superstar.

Thaler loves the Patriots draft and also gives a positive review to the Cleveland Browns. After entering the draft with the 5th pick overall, the Browns traded down three times to take center Alex Mack with the 21st pick, plus defensive end Kenyon Coleman, quarterback Brett Ratliff, safety Abram Elam, a second round pick from the Jets, and sixth round picks from the Buccaneers and the Eagles. That’s a lot of chances to pick up some solid starting players. Football pundits didn’t think so highly of the Browns draft, but none of them are economists.

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Grading an NFL team’s draft become a cottage industry among sports fans and pundits. It’s also a hobby for economist Kevin Hassett, who has taken the economic model developed by Thaler and Massey, and graded teams’ drafts for the past two years. The insight of the Thaler/Massey model he writes in a Bloomberg column, is that “because NFL teams all have to operate under a salary cap, a team can only become better than its competitors by having a number of players who perform far better than their salaries would indicate.”

Hassett has used data from five previous drafts to calculate a Thaler-Massey score for each team. He then uses that score to predict whether teams will have a better or worse record in the sixth season. So far, the model has been largely successful (with occasional misses like predicting New England’s 2007 record would fail to match it’s 2006 record.)

So who were the 2008 draft winners? The Kansas City Chiefs, the Baltimore Ravens, and the Atlanta Falcons.

And the 2008 losers? The Minnesota Vikings, the Cleveland Browns and the Jacksonville Jaguars.

The Thaler-Massey winners and losers match up well with the draft gurus over at Fox Sports who gave Kansas City, Baltimore and Atlanta A grades. The Vikings and the Browns got C and D grades, respectively, while Jacksonville graded out at a B. Over at ESPN, the correlation is mixed. Mel Kiper thought Kansas City again got an A while Baltimore and Atlanta got Bs. Todd McShay wasn’t terribly impressed with Jacksonville or Atlanta’s draft, but liked the Vikings draft.

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We recently received an email suggesting that the number of offensive and defensive lineman taken in this year’s first round of the NFL draft was higher than in recent years. Taking a quick and crude look back at first round selections from 2000-2008, teams did select more linemen this year, 15, than in recent history. However, that number is within two standard deviations of the mean for those eight years – 11.12 with a standard deviation of 2.3 – so it would be hard to say that this year’s draft was a substantial outlier.

The graph of first round draft picks is posted below. Picks were divided into four categories: 1) Quarterbacks; 2) Linemen (offensive and defensive); 3) Skill positions (running back and wide receiver); 4) Defensive backs, linebackers, and tight ends. Kickers were excluded. There don’t appear to be any major surprises or conclusions to be drawn from these trends. All of the picks trade within relatively narrow ranges, and there are no extreme values for any of the four categories.

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By Richard Thaler

With the NFL draft coming up this weekend it seems like a good time to discuss the role of an unusual sort of nudge in that context. Three years ago Yale’s Cade Massey and I released a paper analyzing the NFL draft from a behavioral economics perspective. As casual fans and observers of the draft we thought that teams were falling prey to a series of cognitive biases, including overconfidence, that led them to put too high a value on picking at the very top of the draft.

Since teams often trade picks it is possible to estimate the value teams put on choosing early. That price turns out to be very high. A team can trade the first pick for the eighth and ninth picks, or the last four picks of the first round. For these prices to be rational, the first player taken has to be much better than the eighth player (since he also gets paid nearly twice as much). It turns out that performance is related to draft order, but much less strongly than these prices imply.

Continue reading the post here.

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