Trade Down: Nobel prize winning economist says teams get better value by trading down

Originally posted by Giedi:

I think a trade down strategy will work if you have good scouts and that the coaching and scouting staff are confident in their player evaluations. A factor in player evaluations, says Bill Walsh "Finding the Winning Edge" Page 149 paragraph 8:


Free agency, a shortened draft and an urgency to win [now] affects [the draft in the following manner]
Compared to the past, players from smaller colleges will be less likely to make NFL rosters. The shortened draft (seven rounds -- down from...17 rounds) and the reduced number of players invited to..the combine increase the possibility that teams will overlook such players.

...this is illustrated by the fact that under the circumstances, small college players such as NFL greats Terry Bradshaw, Ken Anderson, and Jackie Smith may not have been drafted. The obstacles facing small college players may be even more acute for athletes from the predominantly black colleges. Historically, black colleges have provided some of the most talented players in the NFL, including such Hall of Fame members as Willi Brown (Grambling), Art Shell (Maryland-Eastern Shore), and Willie Lanier (Morgan State).


The key to a good trade down scenario in my opinion is finding a small college player that the coach and his staff have evaluated as a player they would take in the 2nd or 3rd rounds, but most everybody in the NFL regard as a mid to late round pick.

Finding the Winning edge page 112 paragraph 8: As the draft neared, we did all the research we could and decided that Joe would not be taken before the fifth round if at all. Everyone knew he had poise, but they were put off by his slight appearance, inconsistent performance at Notre Dame, and some believed, [he] had a relatively weak arm. We selected Joe in the Third. Note: that was drafting Joe *earlier* than where they thought Joe would go (which was in the fifth round.) So a trade *up* is as valuable a strategy as a trade *down.*

With all due respect to Bill, that was also a far different era. There was far less data available guiding the decision making of teams. Guys who succeeded based on their gut feeling had a huge leg up over everyone else. Nowadays with a the analytics, there is far less advantage than there used to be. When the Colts and Bill Polian hired him as a consultant prior to the Peyton Manning draft, Walsh's ultimate recommendation to them was to pass on Manning, take the best defensive player and draft Brian Griese in the 2nd round as Walsh figured that Griese could be close enough to Manning as a QB that you wouldn't be losing a whole lot.

Originally posted by Heroism:
Teams who trade down and pick the right players get better value.

Few teams pick the right players.

This. The non-football evaluators forget this part. I like the ESPN 30 for 30 The Grade Trade Robbery on the value of draft picks.

Originally posted by Giedi:

Originally posted by MK_Ultra:

Originally posted by domingo:
Actually, Bill Walsh clearly stated in the San Francisco Chronicle on the Monday after his great 1986 trade down draft that he did NOT plan on trading down going into the draft and that he never planned to do so. It was spontaneous and unplanned and that that was his year to year draft strategy. He simply did not like the players who were available when it came his time to pick in 86. He also said that "if you like a player, go ahead and take him" in reference to not being over obsessed with consensus value. In my opinion going into a draft planning to trade down is a Donahue/Ballke type strategy and look at the rosters those two produced.

Please post a link to that article regarding the 1986 draft. You are wrong about his 1986 draft strategy. Walsh & McVay intentionally planned on acquiring more 3rd rd picks. I still remember watching that draft and I remember that he said they liked the players in the third round and so they intentionally acquired more picks in the 3rd and 4th rounds. "That was a brilliant draft — a legendary draft — and Walsh showed his guts and imagination. He showed he was miles ahead of other personnel people in the league. That is the kind of draft that sets up a franchise for years. "
Walsh's legacy to the Niners was the draft
https://www.vaildaily.com/sports/walshs-legacy-to-the-niners-was-the-draft/

Re: "if you like a player, go ahead and take him" = he did say that, but he was also famous for trading down

Re: trade down is a Donahue/Ballke type strategy = Donahue didn't trade down much, but he was an major idiot. Baalke couldn't evaluate players. That doesn't negate the truth that generally high picks are over-valued and 3rd-6th rd picks are under-valued

I think a trade down strategy will work if you have good scouts and that the coaching and scouting staff are confident in their player evaluations. A factor in player evaluations, says Bill Walsh "Finding the Winning Edge" Page 149 paragraph 8:


Free agency, a shortened draft and an urgency to win [now] affects [the draft in the following manner]
Compared to the past, players from smaller colleges will be less likely to make NFL rosters. The shortened draft (seven rounds -- down from...17 rounds) and the reduced number of players invited to..the combine increase the possibility that teams will overlook such players.

...this is illustrated by the fact that under the circumstances, small college players such as NFL greats Terry Bradshaw, Ken Anderson, and Jackie Smith may not have been drafted. The obstacles facing small college players may be even more acute for athletes from the predominantly black colleges. Historically, black colleges have provided some of the most talented players in the NFL, including such Hall of Fame members as Willi Brown (Grambling), Art Shell (Maryland-Eastern Shore), and Willie Lanier (Morgan State).


The key to a good trade down scenario in my opinion is finding a small college player that the coach and his staff have evaluated as a player they would take in the 2nd or 3rd rounds, but most everybody in the NFL regard as a mid to late round pick.

Finding the Winning edge page 112 paragraph 8: As the draft neared, we did all the research we could and decided that Joe would not be taken before the fifth round if at all. Everyone knew he had poise, but they were put off by his slight appearance, inconsistent performance at Notre Dame, and some believed, [he] had a relatively weak arm. We selected Joe in the Third. Note: that was drafting Joe *earlier* than where they thought Joe would go (which was in the fifth round.) So a trade *up* is as valuable a strategy as a trade *down.*

I'd also say based off of what you posted, Walsh did whatever was needed to improve the quality of the team. Based on the info you provided, he drafted early (a full 2 rounds for Joe Montana), he stood pat and took the elite prospect (1981 draft with Ronnie Lott), he traded down (1986 and 2000 drafts) and traded up (1985 draft for Jerry Rice). Clearly there is no single winning path.

Originally posted by Phoenix49ers:

Originally posted by Giedi:
I think a trade down strategy will work if you have good scouts and that the coaching and scouting staff are confident in their player evaluations. A factor in player evaluations, says Bill Walsh "Finding the Winning Edge" Page 149 paragraph 8:


Free agency, a shortened draft and an urgency to win [now] affects [the draft in the following manner]
Compared to the past, players from smaller colleges will be less likely to make NFL rosters. The shortened draft (seven rounds -- down from...17 rounds) and the reduced number of players invited to..the combine increase the possibility that teams will overlook such players.

...this is illustrated by the fact that under the circumstances, small college players such as NFL greats Terry Bradshaw, Ken Anderson, and Jackie Smith may not have been drafted. The obstacles facing small college players may be even more acute for athletes from the predominantly black colleges. Historically, black colleges have provided some of the most talented players in the NFL, including such Hall of Fame members as Willi Brown (Grambling), Art Shell (Maryland-Eastern Shore), and Willie Lanier (Morgan State).


The key to a good trade down scenario in my opinion is finding a small college player that the coach and his staff have evaluated as a player they would take in the 2nd or 3rd rounds, but most everybody in the NFL regard as a mid to late round pick.

Finding the Winning edge page 112 paragraph 8: As the draft neared, we did all the research we could and decided that Joe would not be taken before the fifth round if at all. Everyone knew he had poise, but they were put off by his slight appearance, inconsistent performance at Notre Dame, and some believed, [he] had a relatively weak arm. We selected Joe in the Third. Note: that was drafting Joe *earlier* than where they thought Joe would go (which was in the fifth round.) So a trade *up* is as valuable a strategy as a trade *down.*

With all due respect to Bill, that was also a far different era. There was far less data available guiding the decision making of teams. Guys who succeeded based on their gut feeling had a huge leg up over everyone else. Nowadays with a the analytics, there is far less advantage than there used to be. When the Colts and Bill Polian hired him as a consultant prior to the Peyton Manning draft, Walsh's ultimate recommendation to them was to pass on Manning, take the best defensive player and draft Brian Griese in the 2nd round as Walsh figured that Griese could be close enough to Manning as a QB that you wouldn't be losing a whole lot.

Yes, times have changed. But times have changes in other ways too. The passing game is so varied now. You have air raid concepts, read option concepts, West coast option concepts, one back, air Coryell etc... In other words, I agree it was a different era where the NFL wasn't as pass happy as it is now. And there are may different kinds of QB's that have won superbowls, from the ultra-maneuverable Midget Wilsons, the accurate cerebral balanced Tom Brady WCO QB's, to the Strong Armed Pocket QB's in Flacco.

The point is that Walsh's point about talent evaluations is still, I think correct. That smaller colleges aren't going to be able to get their players evaluated, the way the big Ohio State and Alabama programs will be scrutinized. He also, I think, correctly says that the NFL has a herd mentality. They all group or evaluate players a certain way and draft a certain way, and a coach with a unique perspective (somebody like Kyle) with different concepts, can use that to draft unorthodox players (Hurd, Deebo, or Make@Wish) and have a good draft or even get undrafted players to make the team like Mullens and Bourne. So a trade down strategy in Kyle's case can work because he's an unorthodox coach.

In this years draft, he did trade down in the 4th to get Make@Wish and landed a couple of extra 6th round picks. I think he can and should continue to do that next year and the year after - once he gets past the 3rd round. At least on the offensive side. I think trading down and landing extra offensive picks after the 3rd round is to Kyle's advantage.

Originally posted by Giedi:
That smaller colleges aren't going to be able to get their players evaluated, the way the big Ohio State and Alabama programs will be scrutinized.

There are third-party scouting agencies who specialize in scouting small colleges that work for NFL teams. We're living in the age of information. It's not even remotely comparable to thirty years ago.

Originally posted by Heroism:

Originally posted by Giedi:
That smaller colleges aren't going to be able to get their players evaluated, the way the big Ohio State and Alabama programs will be scrutinized.

There are third-party scouting agencies who specialize in scouting small colleges that work for NFL teams. We're living in the age of information. It's not even remotely comparable to thirty years ago.

totally agree. But it's the *coaches* and the *GM*'s that make the final decisions and *they* don't visit each small school prospect personally. That is my point. Yes it's the information age and you can see the highlights of practically any player in college on youtube, but that doesn't totally replace a scout from the team working out a particular prospect, or that Scangarello or Kyle working out a particular player from an obscure small school. Also, it's the age of *information overload* and so it works just the same way as in pre-internet days when there was hardly any information on players at all.

Nick Mullens was not among the 15 quarterbacks invited to the NFL Scouting Combine in 2017.
Only the 49ers invited him to their facility a pre-draft visit.
"That was my only visit, but was in contact with a handful of teams," Mullens said recently on The 49ers Insider Podcast.
But when he was not one of the 10 quarterbacks to get drafted, other teams called to try to sign him to their 90-man rosters. He already knew 49ers coach Kyle Shanahan and quarterbacks coach Rich Scangarello, so his decision was easy. His original contract with the 49ers included a $2,000 signing bonus.
https://www.nbcsports.com/bayarea/49ers/49ers-were-only-team-invited-nick-mullens-pre-draft-visit

Originally posted by Phoenix49ers:

Trent Baalke: "ACLs are overvalued"

Originally posted by MK_Ultra:
Please post a link to that article regarding the 1986 draft. You are wrong about his 1986 draft strategy. cks. Walsh & McVay intentionally planned on acquiring more 3rd rd piI still remember watching that draft and I remember that he said they liked the players in the third round and so they intentionally acquired more picks in the 3rd and 4th rounds. "That was a brilliant draft — a legendary draft — and Walsh showed his guts and imagination. He showed he was miles ahead of other personnel people in the league. That is the kind of draft that sets up a franchise for years. "
Walsh's legacy to the Niners was the draft
https://www.vaildaily.com/sports/walshs-legacy-to-the-niners-was-the-draft/

Re: "if you like a player, go ahead and take him" = he did say that, but he was also famous for trading down

Re: trade down is a Donahue/Ballke type strategy = Donahue didn't trade down much, but he was an major idiot. Baalke couldn't evaluate players. That doesn't negate the truth that generally high picks are over-valued and 3rd-6th rd picks are under-valued

Of course I cannot find the article, the Chronicles archives are behind a paywall. You said Walsh and McVay intentionally planned on acquiring more 3rd round picks, can you link something that proves that they pre-planned to trade down? I watched the 1986 draft also and saved the Chron and USA Today papers following the draft. They are long gone now but here is a link from Peter King detailing the spontaneous nature of the 86 draft--

https://www.si.com/vault/1990/04/23/121877/the-genius-at-work-bill-walsh-built-the-san-francisco-49ers-through-brilliant-trading-and-drafting-and-the-1986-draft-was-his-masterpiece The 49ers were targeting three players while they awaited their pick at 18. It was only after those three were gone did Walsh decide to trade down. It was spontaneous and once it started it took on a life of its own. In the other article I cited Bill Walsh was very clear that they did not go into the draft looking to trade down.

If everyone wants to trade down, keep their picks you have a buyer's market and lower trade compensation. It's easy to say trade down but when the Jets are saying it too, and there's not a must have qb etc, etc sometimes you just got make the pick. Do you want a premiere pick or the 10th best prospect and a 70% on the dollar package?

Random thoughts on trading down:

• How set is your roster? If you have a weak roster, trading down would result in more chances to hit on a winner, and you have spots on the 54 man roster to allow them to develop. But on the other hand, if you have a strong roster, you will be forced to cut players you drafted just a few months ago.
• What position are you drafting? If it is a QB, chances are, that drafting for value is not a winning strategy. The vast majority of starting QBs are first round picks.
• Information age still isn't going to tell you who will be arrested or get injured (although it can identify those with a higher than average propensity for those things happening). For small school prospects, if they have never been challenged by elite schools, then it is hard to say how they will do in the pros. The data is just not available to anyone.

Originally posted by MK_Ultra:
Bill Walsh agreed. He often liked to trade down and acquire more picks. Of course sometimes it's better to trade up and sometimes 'stand pat'. But in general, high picks are overvalued and mid round picks are under-valued.

Nobel prize winning economist says teams get better value by trading down
.... study shows that teams overvalue early draft picks. "We find that top draft picks are significantly overvalued....."

Richard Thaler, who changed thinking about the NFL draft, wins Nobel Prize in economics
https://profootballtalk.nbcsports.com/2017/10/09/richard-thaler-who-changed-thinking-about-the-nfl-draft-wins-nobel-prize-in-economics/
" .... multiple psychological factors shows that teams overvalue the chance to pick early in the draft. Using archival data on draft-day trades, player performance we compare the market value of draft picks with the surplus value to teams provided by the drafted players. We find that top draft picks are significantly overvalued in a manner that is inconsistent with rational expectations and efficient markets ....."

"The Loser's Curse: Overconfidence vs. Market Efficiency in the National Football League Draft."
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=697121
https://repository.upenn.edu/oid_papers/170/

I always loved the concept of trading down

However, you have to know what you are doing

Walsh would say " Quality and Quantity"

This whole thread is TLDR

Originally posted by LifelongNiner:
I'd also say based off of what you posted, Walsh did whatever was needed to improve the quality of the team. Based on the info you provided, he drafted early (a full 2 rounds for Joe Montana), he stood pat and took the elite prospect (1981 draft with Ronnie Lott), he traded down (1986 and 2000 drafts) and traded up (1985 draft for Jerry Rice). Clearly there is no single winning path.

Exactly, there is no hard and fast rule. Obviously by far most important is to be able to scout and draft the best quality players, even if you have to take them early or trade up to take them. But the research by the Nobel prize winner PROVES that GM's, esp. novices tend to get arrogant and 'fall in love' with certain players and over-draft them. You must keep a level head and be realistic and not overly fall in love with your players.

Remember Solomon Thomas, Reuben Foster, Witherspoon, CJ Beathard, Joe Williams? They fell in love with all of them and convinced themselves that they MUST HAVE these guys and so they over-drafted them. They traded up for Rd1 Foster (bust), Rd3 CJ (UDFA Mullins is better), Rd 4 Joe Williams (bust)(UDFA Matt Breida is much better), finally got a good player only in the late rounds in Kittle (who would today be a high 1st rd pick)

Originally posted by tjd808185:
If everyone wants to trade down, keep their picks you have a buyer's market and lower trade compensation. It's easy to say trade down but when the Jets are saying it too, and there's not a must have qb etc, etc sometimes you just got make the pick. Do you want a premiere pick or the 10th best prospect and a 70% on the dollar package?

True, oftentime there are no good offers and you just have to pick. Many teams are now aware of this fact that trading up is a dangerous game and oftentimes they don't want to give up too much. Lynch said that they were looking for trade offers for the #2 pick but got zero offers.

But there were many trades available later on as the Seahawks proved by making about 8-10 trades during the draft. The 49ers loved Deebo and Hurd and the punter and didn't want to risk losing them. We will see how it works out, hopefully they are right this time, but they were wrong when they over-drafted Foster, CJ Beathard and Joe Williams in 2017. And over-drafted Dante Pettis and Tarvarius Moore in 2018. They certainly could have traded down or waited to draft those guys later. Hopefully they got it right this time.

Re: lower trade compensation.
Most teams still use the old trade value chart, and the study reveals that you can get good value by trading back using those chart values. And the Seahawks got great value this draft started with 4 picks ended up with 11 picks. Turned their #21 pick into 6 picks including a likely starting safety at #47 and DK Metcalf at #64 plus 4 other good players all for the #21 pick.

I want to hear what a Nobel Prize winner in quantum theory has to say about this.

Originally posted by MK_Ultra:

Originally posted by tjd808185:
If everyone wants to trade down, keep their picks you have a buyer's market and lower trade compensation. It's easy to say trade down but when the Jets are saying it too, and there's not a must have qb etc, etc sometimes you just got make the pick. Do you want a premiere pick or the 10th best prospect and a 70% on the dollar package?

True, oftentime there are no good offers and you just have to pick. Many teams are now aware of this fact that trading up is a dangerous game and oftentimes they don't want to give up too much. Lynch said that they were looking for trade offers for the #2 pick but got zero offers.

But there were many trades available later on as the Seahawks proved by making about 8-10 trades during the draft. The 49ers loved Deebo and Hurd and the punter and didn't want to risk losing them. We will see how it works out, hopefully they are right this time, but they were wrong when they over-drafted Foster, CJ Beathard and Joe Williams in 2017. And over-drafted Dante Pettis and Tarvarius Moore in 2018. They certainly could have traded down or waited to draft those guys later. Hopefully they got it right this time.

Re: lower trade compensation.
Most teams still use the old trade value chart, and the study reveals that you can get good value by trading back using those chart values. And the Seahawks got great value this draft started with 4 picks ended up with 11 picks. Turned their #21 pick into 6 picks including a likely starting safety at #47 and DK Metcalf at #64 plus 4 other good players all for the #21 pick.

You miss the overall point. You can add all the players you want. Their drafts have been the drizzling you know what for years. We haven't had the greatest drafts but if you ask me who's drafts would I take our or theirs from 2016 to 2019, I take ours, easily. Their QB, the 2012 draft and Frank Clark has covered up their poor drafting, much like how Steve Young and Jerry Rice covered ours throughout most of the 90s. At the end of the day, you have to make the picks. Period. No matter where you are drafting. And when you have a franchise QB in place, you can afford to trade back and whiff a lot more, which is exactly what they have done. We either didn't have a franchise QB in place or our guy was hurt, which is why our whiffs have hurt a lot more.