Why Teams Don't Spend More on the Draft
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1| BBTF's Baseball Primer Newsblog found this 4/21/2008 on www.thegoodphight.com [flag] |
The following logic is fairly common among baseball fans and experts today: "The expected gain in wins (and hence, revenue) by paying above the recommended slot values for draft picks is higher than paying the equivalent amount of money for free agents." I would not attempt to argue with this logic. On average, it is overwhelmingly true. The question then becomes: "Why do ...
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Philadelphia Phillies
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Why Teams Don’t Spend More on the Draft
Published 4/21/2008 at BBTF's Baseball Primer Newsblog
Why Teams Don’t Spend More on the Draft Featuring the Philadelphia Phillies as “Frightened Inmate #2"… The [Prisoners’ Dilemma] analogy to baseball should be pretty clear. If you agree to pay the recommended slot values, you may encourage other teams to do so in the future. Undoubtedly, this does happen. In fact, it is the reason that teams make significant profits at all. If teams paid players the expected revenue gain above their salaries before hitting free agency, they would make little money. As free agent’s salaries are nearly the same as expected revenues that they ...
