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The Economics Of The NFL Draft

The worst NFL teams get to pick first in the draft each year. But teams actually get a better deal when they pick later in the first round, an economist argues.

Richard Thaler (of Nudge fame) writes in Sunday's NYT that there's only a 52 percent chance that a player picked earlier in the round will start more games than a player picked later in the round. That's only slightly better than the 50 percent chance there would be if there were no difference at all.

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 ...

If this sounds somewhat familiar, maybe it's because you read Thaler's paper on the subject, which is posted over at the Social Science Research Network (Motto: "Tomorrow's Research Today"). Or maybe it's because you remember Malcolm Gladwell mentioning an earlier draft of the paper in his online debate with ESPN's Bill Simmons.