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

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 (similar to 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 similar to 17.6% and similar to 31.1% for Indian and foreign players, respectively.

Automated summary

The IPL is the most popular T20 domestic league globally, and its mega auction, which occurs every three years, has been found to be inefficient and time-consuming. To address this issue, a two-stage algorithm has been proposed in this study to determine the base prices of players, with K-Means clustering used to group players and a developed assignment logic to allocate base prices. Empirical evidence shows that the proposed algorithm improves efficiency by reducing time by approximately 17.6% and 31.1% for Indian and foreign players, respectively.