Hindustan Times (Delhi)

Righttomat­ch could control auction dynamics

- Karthik Shashidhar karthik.shashidhar@gmail.com is from the IPL website. the order in which players were auctioned in 2014 comes from Cricbuzz. is author of Between the Buyer and the Seller, a book on market design and liquidity. He has been writing Elect

ONE DAY TO GO Strategy of teams while using their key privilege is likely to influence the course of this year’s mega auction

One feature of the last major IPL auction in 2014 was that on average, batsmen commanded a much higher price than bowlers. Looking at the reserve prices that players have set for themselves for this weekend’s auction, it wouldn’t be surprising if a similar pattern were to emerge once again.

The 578 players registered for the auction have been split into 62 sets which will be taken up sequential­ly. While the first two sets consist of highly sought after “marquee players”, the other sets are organised by the player’s speciality, with further division among players who have played internatio­nal cricket and those who have not.

Based on this classifica­tion, we find that the average reserve price for batsmen is far higher than that of bowlers, wicketkeep­ers and allrounder­s.

Given that players set their reserve prices based on their expectatio­n of what they can fetch, we can expect batsmen to do better once again.

The auction itself will be a simple ascending price open outcry (“English”) auction. Starting with the reserve price, an auctioneer increases the price in predetermi­ned intervals, with teams having to indicate their interest or lack thereof.

When only one bidder remains in the race, the player is “sold” to that team.


The only complicati­on to the process is the “Right-to-match card”, which allows teams to retain their existing players in excess of who they retained prior to the auction. A team holding a Right-to-match card on a player can simply agree to match the player’s winning bid after the bidding for the player has been completed.

This card plays havoc with the auction process by bringing in a measure of opacity into what is otherwise an extremely transparen­t process.

Rather than all teams openly declaring their willingnes­s to pay for a player by either remaining in or leaving the auction, a team with the Right-toMatch card can simply wait in eeer an ne pe r r stle Alde r lr quay m Faw un arpl ts Sp tk Bo in ee

M Ba Ro ke ic


Average Reserve Price (~ Lakh)

the wings and make a decision once all other teams have shown their hands.

Consequent­ly, when a player for whom a Right-to-match card exists is being auctioned, teams have to second guess the willingnes­s to pay of the team that holds the card and bid accordingl­y.

Prior to the 2014 auction, I had suggested that teams might want to continue bidding for a player even when no other team is left in the auction, just so that the right to match option may not be exercised (http://www.livemint .com/consumer/194dl4qlzu­Muqmti5cvy­vj/who-will-


While this situation didn’t arise, there were several instances of another bizarre situation where teams that held the Rightto-match card participat­ed in the open auction, thus increasing the price they had to pay.

It will be interestin­g to see what the teams have learnt from the 2014 auction, and how the Right-to-match card will influence bidding this weekend.


Given that players are auctioned in sequence, there is a massive element of luck that affects a player’s valuation. Since teams are uncertain about which players they might get in the future, they are likely to bid more aggressive­ly on players who are auctioned earlier on.

As shows, players who were auctioned earlier in 2014 commanded a far higher valuation than those that came later.

While this might be influenced by the fact that the first two rounds had marquee players, shows that even when we control the round in which a player was auctioned, the player’s position in the round has some bearing on the median valuation.

From this perspectiv­e, it is interestin­g that the list published on the IPL website shows an interleavi­ng of the auction of capped and uncapped players. If this order is indeed followed, it might lead to good sums being spent on uncapped players.

Apart from all this, the usual convention­s will apply to this weekend’s auctions. Thanks to league rules that require each playing eleven to consist of at least seven Indians, domestic players will be at a premium at this auction.

There will be surprises — some players will go for amounts far in excess of their reserve prices — while other players with similar reputation­s will go unsold. Some teams’ bidding strategy will be hard to understand, while others will seem well-planned. It may not be unfair to say that the auction will be more exciting than a lot of IPL matches!

Newspapers in English

Newspapers from India