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Mistaking Style for Substance: Investor Exuberance in the 2008 Indian Premier League Auction

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Borooah, Vani and Mangan, John (2011) Mistaking Style for Substance: Investor Exuberance in the 2008 Indian Premier League Auction. Journal of Sports Economics, 1527002511406994 . [Journal article]

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DOI: 10.1177/1527002511406994

Abstract

The formation of the Indian Premier League (IPL) in 2008 sought to unlock the commercial potential that the popularity of T20 cricket offered by modelling itself on football's English Premier league. The IPL acted as a holding company, securing the participation of players through a guaranteed base price and then selling these players to the various IPL franchises though an auction system which determined their final payment. There were thus two components to a player's "value": the base price determined by the IPL and the final price paid at the IPL auction by the winning bid for that player. The basic assumption made in this paper is that the base price for a player is founded for the most part on the publicly available information about him. However, auction under IPL 2008 was characterised with large and unexpected base-final price differences. This raises the possibility that the bidding process was driven by the “irrational exuberance” created within the newly formed franchises. This paper measures the scale of such exuberance and evaluates, on the basis of their IPL record, whether players were good or bad buys.

Item Type:Journal article
Faculties and Schools:Faculty of Social Sciences
Faculty of Social Sciences > School of Economics
Research Institutes and Groups:Institute for Research in Social Sciences
Institute for Research in Social Sciences > Social Work & Social Policy
ID Code:20461
Deposited By:Professor Vani Borooah
Deposited On:09 Nov 2011 13:44
Last Modified:09 Nov 2011 13:44

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