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Uncertainty, Hiring, and Subsequent Performance: The NFL Draft

Wallace Hendricks; Lawrence DeBrock; Roger Koenker

University of Illinois System

In this article, we analyze the impact of uncertainty on the hiring process. We show the connection between models of statistical discrimination where uncertainty can work against groups that have less reliable indicators of future productivity and models of option value where uncertainty about future productivity can be beneficial for these groups. These models generate hypotheses about the relationship between ex ante hiring patterns and ex post productivity. This is applied to the market for NFL football players. We provide various estimates of NFL success, which suggest that statistical discrimination and option value influence choices in this market.

DOI

10.1086/377025

Volume

21 (4)

Pages

857-886

Language

en

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BibTeX

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