The dilemma of choosing talent: Michael Jordans are hard to find
This article explores the dilemma of choosing talent using NBA data from 1987 to 2003. We find there is much uncertainty in selecting talent. If superstars are found, they are usually identified early. However, more false positives exist than correct decisions with high draft picks. Our results suggest the dilemma of choosing talent is not so much a winner's curse but more like a purchase of a lottery ticket. Most times you lose, but, if you are going to win, you must buy a ticket.
Volume (Year): 41 (2009)
Issue (Month): 25 ()
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"The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics,"
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- Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
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