Base price determination for IPL mega auctions: A player performance-based approach

Abstract

Indian Premier League (IPL) is the most popular T20 domestic league in the world. An essential aspect of this league is the “Mega-Auction”, which is of focus in this study. The mega auction occurs once every three years, and it is found that the auction process is inefficient as the time taken is long (∼2 days). This is because players specify their base price. Thus, this study focuses on the efficiency of the auction process and addresses it by prescribing the base price for players. The base prices are prescribed such that they are as close to the actual auction price of a player. Accordingly, in the past, only two mega auctions occurred in 2014 and 2018, and both are considered in this work. Here, a two-stage algorithm to determine the base prices of players is proposed. In the first stage, K-Means clustering is used to group players. The base price for players allocated to a cluster is proposed using a developed assignment logic in the second stage. An empirical demonstration of the proposed algorithm indicates that the auction process has been made efficient as the time taken decreases by ∼17.6% and ∼31.1% for Indian and foreign players, respectively.