The Indian Cricket Auction
https://www.sbnation.com/lookit/2017/2/20/14668466/ipl-cricket-auction-free-agency-so-very-cruel
The auction held in the Indian Premier league is unprecedented in sports. Usually, when players are free agents, they get some say in what team they wish to play for, since players will usually have multiple offers. In cricket though, it seems that players have no power at all in where they will play from one year to the next. The 10 year purge of all players from their respective teams is also fascinating, since it goes against the concept of franchise players so many teams in other sports depend on for sales and success. The dynamic of “reverse bidding,” although described as cruel, does seem similar to free agents being offered lower value contracts than their previous ones in other sports. Although it is more humiliating to have owners publicly say you aren’t worth your old contract, it feels like this is something that happens in every sport as free agents get older and slower. This shouldn’t be viewed as cruel like the article claims, it’s simply a harsh consequence of doing business in an auction format.
Although the auction uses a fairly simple ascending bid format, the auction is by no means simple. In class, the auctions we have discussed usually involve buying one item. However, the Indian cricket auctions can have teams buying enough players to fill an entire team. This means that a team’s budget is not completely representative of how much they can pay for a single person. Instead, buyers have to determine how much they’re willing to spend on each player dynamically in real time. Some teams trying to fill rosters after missing several key players early on may be more willing to spend more later in the auction, and others might choose to spend low on cheaper players in order to make a big splash on stars offered instead. No strategy is necessarily the best, and this means teams can completely change their strategies mid-auction. For example, if a team goes after a star player and spends most of their budget, then the price for other players the buyer bids for is significantly lowered from now on. However, if that bidder gets their star player for less than their highest price, then the highest price for all other players go up. Likewise, sometimes players go for more than expected, but the bidder is willing to overspend a bit and adjust his or her price flexibility on future bids. Every auctioned player offers different bidding tactics, and those tactics are constantly changing.