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The NBA Draft

Author

Listed:
  • Barbara Arel
  • Michael J. Tomas III

Abstract

The National Basketball Association (NBA) has a fixed salary schedule that allows us to examine this labor market to understand the incentives for players to enter the draft. Previous studies have focused on labor as a choice from the team’s perspective. Early entry into the NBA draft is similar to the decision to exercise an American style put option early; the draftee sells his remaining time in college early. Using mock draft and actual draft data, the authors find early exercise to be rational for all class ranks; though the early exercise boundary is considerably different for freshmen and juniors.

Suggested Citation

  • Barbara Arel & Michael J. Tomas III, 2012. "The NBA Draft," Journal of Sports Economics, , vol. 13(3), pages 223-249, June.
    • Handle: RePEc:sae:jospec:v:13:y:2012:i:3:p:223-249
    DOI: 10.1177/1527002511406128
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    References listed on IDEAS

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    Cited by:

    1. Martin Grossmann, 2021. "Asymmetric Opportunities After an Unsuccessful Sports Career," Journal of Sports Economics, , vol. 22(5), pages 587-612, June.
    2. Richard J. Paulsen, 2022. "Peer effects and human capital accumulation: Time spent in college and productivity in the National Basketball Association," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3611-3619, December.

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