Combinatorial Auctions for Player Selection in the Indian Premier League (IPL)

Abstract

In 2008, the benefits of team formation by auction first became apparent in the field of professional cricket. The Indian Premier League organized sequential single-item auctions to allocate 77 cricketers to eight teams that participated in a Twenty20 cricket tournament. We argue in this article that the auction format used resulted in distortion of player valuations. We recommend a combinatorial auction scheme MRPF which enables bidders to exploit the complementary nature of the resources. A laboratory experiment undertaken to test the feasibility of MRPF indicated that it would result in a more efficient auction system.

Keywords

combinatorial auctions multiround auction cricket Indian Premier League (IPL)information feedback

Get full access to this article

View all access options for this article.

References

Adomavicius

Curley

Gupta

Sanyal

(2011). Effect of information feedback on bidder behavior in continuous combinatorial auctions. Management Science, Articles in Advance, 1–20.

Adomavicius

Gupta

(2005). Toward comprehensive real-time bidder support in iterative combinatorial auctions. Information Systems Research, 16, 169–185.

Basu

(2008, January 27). Does the IPL model make sense? The Times of India. Retrieved from http://articles.timesofindia.indiatimes.com/2008-01-27/special-report/27748861_1_ipl-indian-premier-league-prize-money

Bennett

J. M.

Flueck

J. A.

(1983). An evaluation of major league baseball offensive performance models. The American Statistician, 37, 76–82.

Borooah

V. K.

Mangan

(2012). Mistaking style for substance: Investor Exuberance in the 2008 indian premier league auction. Journal of Sports Economics, 13, 266–287.

Chakraborty

Sen

A. K.

Bagchi

(2008). Reducing operational overheads of seller and bidder in online combinatorial auctions. Workshop on Information Technologies and Systems, Paris, France.

Cramton

(2006). Simultaneous ascending auctions. In Cramton

Shoham

Steinberg

(Ed.), Combinatorial auctions. (pp. 99–114). Cambridge, MA: The MIT Press.

Dobson

Goddard

(1998). Performance, revenue, and cross subsidization in the football league, 1927-1994. The Economic History Review, 51, 763–785.

Estenson

(1994). Salary determination in major league baseball: A classroom exercise. Managerial and Decision Economics, 15, 537–541.

10.

Fama

(1970). Efficient capital markets: A review of theory and empirical work. Journal of Finance, 25, 383–417.

11.

Fort

Rodney, D.

(2006). Sports economics (3 ed.). Prentice Hall, NJ.

12.

Goeree

J. O.

Holt

A. C.

Ledyard

J. O.

(2006). An experimental comparison of the FCC’s combinatorial and non-combinatorial simultaneous multiple round auctions. Report for Wireless Telecommunications Bureau of the Federal Communications Commission (FCC). Retrieved from http://wireless.fcc.gov/auctions/data/papersAndStudies/fcc_final_report_071206.p

13.

Hausman

J. A.

Leonard

G. K.

(1997). Superstars in the national basketball association: Economic value and policy. Journal of Labor Economics, 15, 586–624.

14.

Jones

J. C. H.

Walsh

W. D.

(1988). Salary determination in the national hockey league: The effects of skills, franchise characteristics, and discrimination. Industrial and Labor Relations Review, 41, 592–604.

15.

Kahn

L. M.

(1992). The effects of race on professional football players’ compensation. Industrial and Labor Relations Review, 45, 295–310.

16.

Kamath

(2008, February 2008). IPL is an idea whose time has come. Business Line. Retrieved from http://www.thehindubusinessline.com/todays-paper/article1111722.ece

17.

Karnik

(2010). Valuing cricketers using hedonic price models. Journal of Sports Economics, 11, 456–469.

18.

Klemperer

(2004). Auctions theory and practice. Princeton, NJ: Princeton University Press.

19.

Krishna

(2002). Auction theory. London, England: Academic Press.

20.

Kwasnica

A. M.

Ledyard

J. O.

Porter

DeMartini

(2005). A new and improved design for multiobject iterative auctions. Management Science, 51, 419–434.

21.

Lenten

L. J. A.

Geerling

Konya

(2012). A hedonic model of player wage determination from the indian premier league auction: Further evidence. Sport Management Review, 15, 60–71.

22.

Leyton-Brown

Pearson

Shoham

(2000). Towards a universal test suite for combinatorial auction algorithms. EC ’00 Proc. 2nd ACM Conf. Electronic Commerce, (ACM Press, New York), pp 66–76.

23.

MacDonald

D. N.

Reynolds

M. O.

(1994). Are baseball players paid their marginal products? Managerial and Decision Economics, 15, 443–457.

24.

Pande

(2011, April 7). IPL-4: IPL’s brand value falls by 11% to $3.67 billion. The Economic Times. Retrieved from http://articles.economictimes.indiatimes.com/2011-04-07/news/29392570_1_brand-finance-indian-premier-league-ipl

25.

Parker

Burns

Natarajan

, (2008). “Player valuations in the Indian Premier League,” Frontier Economics, October 2008, 1–17.

26.

Rassenti

S. J.

Smith

V. L.

(1982). A combinatorial auction mechanism for airport time slot allocation. Bell Journal of Economics, 13, 402–417.

27.

Rastogi

Deodhar

(2009). Player pricing and valuation of cricketing attributes: Exploring the IPL twenty-twenty vision (Working Paper). Ahmedabad, India: IIM Ahmedabad.

28.

Sandholm

(2002). Algorithm for optimal winner determination in combinatorial auctions. Artificial Intelligence, 135, 1–54.

29.

Sheikh

(2012, April 7). Five seasons on, ipl returns remain below expectations. LiveMint.com, The Wall Street Journal. Retrieved from http://www.livemint.com/2012/04/07003654/Five-seasons-on-IPL-returns-r.html

30.

Swartz

T. B.

(2011). Drafts versus auctions in the indian premier league. South African Statistical Journal, 45, 249–292.

31.

Walsh

W. E.

Wellman

M. P.

(2000). Combinatorial auctions for supply chain formation. ACM Conference on Electronic Commerce, (EC-00), 260–269.

32.

Yossi

(2004). Combinatorial auctions in the procurement of transportation services. Interfaces, 34, 245–252.