The Amateur Draft, Competitive Balance, and Tanking in the National Basketball Association

This dissertation explores the NBA Draft. Throughout North American sports leagues, league executives state that the amateur draft is necessary to improve or maintain league-wide competitive balance. For the NBA, the amateur draft has caused a separate, but interrelated issue. The issue is that the presence of an amateur draft provides the incentive for NBA teams who are eliminated from playoff contention to tank (intentionally lose games) late in the regular season to improve their draft position and receive a better chance of getting a top draft pick. A top draft pick benefits a team both on and off the court (Price, et al 2010). In an attempt to deter tanking but maintain competitive balance, NBA executives have changed the draft format four times in the last 30 seasons. However, continuous debate still occurs regarding whether NBA executives should modify the draft process again. This dissertation explores three distinct research questions regarding the NBA draft format changes. The first paper examines the NBA point-spread betting market to see whether book-makers believe that tanking is present in the league. If tanking is occurring, how much does the spread adjust for tanking? The second paper examines the potential tanking behavior of teams in conference and nonconference games under all four NBA draft formats. Finally, the third paper explores the impact the various NBA draft formats have on league-wide competitive balance.