Escalation Effects and the Player Draft in the AFL
Posted: 6 May 2016
Date Written: 2011
This study investigates escalation effects in the Australian Football League (AFL). We use a sample of players selected in the AFL player draft (National Draft) between 1986 and 2002, and test for escalation effects by examining whether a player’s draft order affects his subsequent utilisation by the club to which he was drafted. Utilisation is represented with measures of games played and tenure. Limited evidence of an escalation effect is found. Any relation between a player’s draft order and his games played and tenure at the club to which he was drafted is concentrated in the early years of his career, and this apparent relation can be explained by the information about a player’s ability that is contained in the player’s draft order and by incentives for clubs to provide greater playing experience to higher ability players. Escalation effects in the AFL competition are therefore much weaker than have been found in studies of the US National Basketball Association (NBA). It is suggested that differences in the structure of the competitions may explain why the escalation effect in the AFL would be weaker than in the NBA.
Keywords: Escalation Effect, Sunk Cost, Player Draft, Career Concerns, Australian Rules Football
JEL Classification: D01, J40
Suggested Citation: Suggested Citation