Sage Journals: Discover world-class research

Abstract

We estimate the implied discounted rate associated with trades of National Football League (NFL) draft picks that involve draft picks in different years. The NFL conducts an annual draft of draft-eligible college football players. NFL executives use draft charts to determine the value of each draft pick, and we use this draft chart to estimate the implied discount rate of trades combining current and future year draft picks. Using data from the full sample of 61 NFL trades of draft picks containing a combination of current and future year draft picks occurring from 2002 through 2016, we find that the implied discount rate ranges from $-$ 172.50% to 625.81%. We find that, for the 57 draft day trades, the implied discount rate is positively associated with the head coach’s tenure of the team giving away the future draft pick.

Keywords

National football league draft picks draft value implied discount rate Data Availability: Data available from sources identified in the paper.

Get full access to this article

View all access options for this article.

References

West

, et al. Estimating implied rates of discount in healthcare decision making. Health Technology Assessment. 2003; 7(30).

Kim

Habb

. Temporal insensitivity of willingness to pay and implied discount rates. Resource and Energy Economics. May 2009; 31(2): 89-102.

Kirby

Petry

Bickel

. Heroin addicts have higher discount rates for delayed rewards than non-drug-using controls. J Experimental Psych General. 1999; 128(1): 78-87.

Cowherd

. The herd with colin cowherd. Fox Sports. [Online] [Cited: December 6; 2017.] https//www.foxsports.com/watch/the-herd-with-colin-cowherd/video/646789699764.

Hurley

Pavlov

Andrews

. A valuation model for NFL and NHL draft positions. J Operational Research Society. 2012; 63(7). doi: http://dx.doi.org/10.1057/jors.2011.93.

Hill

. 2017 NFL Draft: Creating a Brand New Draft Value Trade Chart. Pats Pulpit. [Online] April 23, 2017. [Cited: December 9, 2017.] https//www.patspulpit.com/2017/4/23/15398184/2017-nfl-draft-creating-a-brand-new-nfl-draft-value-trade-chart.

Rogers

. Ranking All 32 NFL GM’s by Tenure. Ranking-all-32-NFL-GMs-by-Tenure. 247sports.com. [Online] June 27, 2016. [Cited: December 14, 2017.] https//247sports.com/Gallery/Ranking-all-32-NFL-GMs-by-Tenure-46002475.

Gaines

. NFL head coaches have good job security when compared to other major sports leagues. Business Insider. [Online] December 20, 2016. [Cited: December 14, 2017.] http//www.businessinsider.com/coaches-managers-tenure-nfl-mlb-nba-nhl-premier-league-2016-12.

Massey

Thaler

. The loser’s curse: Decision making and market efficiency in the national football league draft. Management Science. 2013; 59(7): 1479-1495.

10.

Stahl

. Bargaining Theory. Stockholm: Stockholm School of Economics. Stockholm: Stockholm school of economics, 1972.

11.

Rubenstein

. Perfect equilibrioum in a bargaining model. Econometrica. 1982; 50(1): 97.

12.

Conlin

. Empirical test of a separating equilibrium in national football league contract negotiations. The RAND J Economics. 1999; 289: 2.

13.

Vukina

Sheng

. Bargaining, search, and price dispersion: Evidence from the live hogs market. Agricultural and Resource Economics Review. 2010; 39(20): 534-546.

14.

Backus

Blake

Tadelis

. Cheap Talk, Round Numbers, and the Economics of Negotiation. 2015; NBER Working Paper No. 21285.

15.

Brander

. Draft trade chart. Pro Football talk. [Online] NBC Sports, October 21, 2010. [Cited: December 6, 2017.] http//profootballtalk.nbcsports.com/draft/draft-trade-chart.

Estimating the implied discount rate: An application to multi-year nfl trades of draft picks

Abstract

Keywords

Get full access to this article

References