The Winner of the NFL Draft is Not Necessarily Cursed

Football analysts traditionally determine the relative value of draft picks by average future player value at each draft position. One implication is the loser's curse: top draft picks belonging to last year's worst teams produce less surplus value on average than draft picks later in the first round belonging to better teams. Additionally, these valuations do not match the valuation implied by the trade market. Either general managers are making terrible trades on average, or there is a sound economic reason for the discrepancy; we are partial to the latter explanation. Traditional analyses don't consider that variance in performance decays convexly accross the draft, causing eliteness (e.g., right tail probability) to decay much more steeply than expected value. Because elite players have an outsize influence on winning the Super Bowl, we suspect general managers value performance nonlinearly, placing exponentially higher value on players as their eliteness increases. Draft curves that account for this closely resemble the trade market. Additionally, we create draft curves that adjust for position via a novel Bayesian hierarchical Beta regression model. We find that if you are interested in an elite quarterback, there is no loser's curse.