Optimal balance between surplus value and eliteness/variance in NFL draft utility

Determine the optimal balance between maximizing expected surplus value (the expected first-contract performance of a drafted player minus his draft-position-determined compensation) and prioritizing eliteness and variance (the probability of selecting players in the extreme right tail of the performance distribution) when specifying the utility function used to value National Football League draft positions for roster construction aimed at maximizing Super Bowl success.

Background

The paper challenges the prevailing approach of valuing NFL draft picks by expected surplus value, arguing that general managers may instead rationally prioritize the probability of acquiring elite, transformational players—i.e., emphasizing variance and right-tail outcomes. The authors construct Bayesian hierarchical models to estimate conditional performance distributions and show that draft trade behavior aligns more closely with right-tail probability valuations than with expected surplus value.

In the Discussion, the authors note that their analysis does not fully resolve how teams should value draft picks, particularly regarding the trade-off between surplus value and eliteness/variance, and call for more comprehensive modeling that links draft decisions to Super Bowl win probability. They explicitly state that determining the optimal balance remains open.