A valuation model for NFL and NHL draft positions

Abstract

This paper describes an approach to the valuation of draft positions for the annual National Football League and National Hockey League entry drafts. We then use this valuation to evaluate and construct exchanges of draft positions.

Keywords:

• draft position value
• NHL
• NFL
• OR in sports

Notes

1 http://www.draftcountdown.com/features/Value-Chart.php

2 The winner's curse is a phenomenon that is sometimes observed in auction markets. Typically the winning bidder will pay more than the value of the asset to get it. This is easily seen if we model a bidder's assessment of the value of the asset as a drawing from a symmetric probability distribution centred on the asset's true value. Under this assumption, the winning bid will exceed the value of the asset with high probability.