A DECISION MODEL FOR STUDENT-ATHLETE ENTRY INTO THE NBA DRAFT

Abstract

We develop a Markov Decision Process model using the framework of an optimal stopping problem to describe whether or not a student-athlete should enter the National Basketball Association (NBA) draft early. Our model uses a simulation algorithm for estimating the draft value of a student-athlete to inform his decision as he evaluates whether or not he should enter the NBA draft and forgo his remaining college eligibility. The model incorporates the shift in player evaluation for the draft that is now heavily focused on a student athlete's potential rather than the talent that a student-athlete displays in the collegiate game. The algorithm generates two estimates, one biased high and one biased low, both asymptotically unbiased as the computational effort increases and converging to the student-athlete's draft value.