The Evolution of Draft Lotteries in Professional Sports: Back to Moral Hazard?

Yigal Gerchak, Helmut E. Mausser and Michael J. Magazine
Additional contact information
Yigal Gerchak: Department of Management Sciences, University of Waterloo, Waterloo, Ontario, Canada N2L 3G1
Helmut E. Mausser: School of Business, University of Colorado, Campus Box 419, Boulder, Colorado 80309
Michael J. Magazine: Department of Management Sciences, University of Waterloo, Waterloo, Ontario, Canada N2L 3G1

Interfaces, 1995, vol. 25, issue 6, 30-38

Abstract: In several North American professional sports, teams choose (draft) new players each year in inverse order of their end-of-season standings. Since drafting early is valued highly, teams that are not doing well might be tempted not to try hard in the last few games of the season, since by losing they might improve their draft position. To alleviate this potential problem, the National Basketball Association, since 1985, has held an annual draft lottery among the teams that did not qualify for that season’s playoffs. Initially the lottery was one of equal chance; it is now heavily biased in favor of the weakest teams. A very biased draft lottery has also just been instituted by the National Hockey League. We have calculated the probabilities of different draft positions by a team’s regular season standings and the resulting expected draft positions for all these lottery formats. For current schemes the expected draft positions turn out to be almost what they would have been without a lottery.

Keywords: recreation/sports; probability (search for similar items in EconPapers)
Date: 1995
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/inte.25.6.30 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:25:y:1995:i:6:p:30-38

Access Statistics for this article

More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().