Fit to be Tied: The Incentive Effects of Overtime Rules in Professional Hockey

By: Jason Abrevaya

Andrew SmithEcon 340: Economics of Sports

Abstract

• This article analyzes the effects of a change in incentive schemes implemented by the NHL.

• This “change” made by the League deals with how points are given to teams in Overtime games

Background

• The NHL is the major pro hockey league in America and has 30 teams.

• The top 8 teams in each Conference make the playoffs based on a ‘point system.’

• Old NHL point system, prior to 1999-2000:– 0 points for a loss. (including overtime)– 1 point for a tie.– 2 points for a win.

• There is more incentive for a team to play for a tie than risk a loss.

Background

• Prior to the 1999-2000 NHL regular season, an abundance of games ended in ties.

• Ties do not occur in other sports leagues.– MLB, NBA, NFL (rarely)

• American sports fans do not like ties. • Quality of the NHL product was diminished by

teams playing conservative and defensive in the 3rd period of games.

Background

• Starting with the 1999-2000 season, the NHL made 2 rules changes regarding OT games:

1) A team that loses in overtime receives 1 point.

2) OT is played with 4 skaters (plus the goalie) per team, rather than the 5 skaters used by each team in regulation play.

Note: OT = Overtime

Questions

• How do the new OT rules of the NHL benefit the incentives facing each team?

• How do the new OT rules of the NHL benefit the incentives for fans?

• Will the new OT rules successfully address consumer demand?

Methodology

• Data– 1995-1996 season through 2001-2002 season.– All 30 NHL teams.– 7,821 regular season games.

• Regression Analysis– Linear regression models and probit models are used to

predict the likelihood of a game reaching OT.– 3 Sets of Games are considered.

• All Games• Games Tied with 20 Minutes left.• Games Tied with 10 Minutes left.

Variables• Dependent Variables

– 3rd Period Shots-on-Goal Indicator– OT Indicator– No-additional-goal Indicator

• Independent Variables– Old rules– In division games– Day / Game # of the season– Average # of goals scored by the home team (Hgf)– Average # of goals scored by the visiting team (Vgf)– Average # of goals allowed by the home team (Hga)– Average # of goals allowed by the visiting team (Vga)– Difference in team quality (teamdiff)

Regression ResultsAll Games Games Tied with 20 Minutes Left Games Tied with 10 Minutes Left

3rd Period Shots-on-Goal

Overtime No Goals in Last 20 Minutes

3rd Period Shots-on-Goal

Overtime No Goals in Last 20 Minutes

3rd Period Shots-on-Goal

Overtime No Goals in Last 10 Minutes

Oldrule 0.3011** -0.0755** 0.4933**

Indivision 0.0715** 0.0942** 0.1842** 0.1572**

dayofseason

Hgf 0.6874** -0.1315** 0.8625**

Vgf 0.3956** 0.8704**

Hga 1.1272** -0.1608** 1.3921** -0.1588* -0.1995** 1.1681** -0.1932** -0.2027**

Vga 1.3329** -0.0843** -0.2206** 1.5830** -0.2097** -0.2771** 1.4402** -0.2368** -0.1422*

Teamdiff -0.2106** -0.1232**

* Significant at the 1% level.** Significant at the 5% level.

NHL ResultsOld OT Rules (1995-1996 to 1998-1999)

New OT Rules (1999-2000 to 2001-2002)

Win 2 2

Tie 1 1

Loss (OT) O 1

Loss (non-OT) 0 0

Number of Games 4,251 3,570

% of Games going into OT 19.8% 22.2%

% of OT Games ending in a Tie

71.1% 55.5%

Average OT shots-on-goal in OT games

3.76 4.54

Average OT shots-on-goal in games ending in a tie

3.97 5.46

Percentage of Games Going Into OT (Table 4)

Old OT Rules (1995-1996 to 1998-1999)

New OT Rules (1999-2000 to 2001-2002)

Change P-Value

Divisional 20.5% 24.7% +4.2% .0162

Non-Divisional 19.5% 21.4% +1.9% .0726

P-Value .4460 .0424

Conclusions

• The NHL achieves its goal of making OT more exciting for fans and having fewer OT games end in ties.– Percentage of OT games ending in a tie drops from 71.1% to

55.5%.• More OT games are played as a result of teams

receiving a point for getting to OT.– Percentage of OT games occurring goes from 19.8% to

22.2%.• Overall % of games ending in a tie drop from 14.1% to

12.3%.• Incentives for teams and fans are satisfied.

Economic Theory

• How does this case apply to what we have studied in class?

• Regression Analysis – Relationship of variables based on observed data.

• P-values• Team Incentives• Fan Demands

Overtime Alternatives?

• In a 2002 poll, 75% of surveyed fans were pleased with the new OT format.

• However, additional incentive for reaching OT could have been removed.

• Alternative 1:– 3 points for a regulation win.– 2 points for an OT win.– 1 point for an OT loss.– 0 points for a regulation loss.

• Alternative 2:– Leave the original OT system intact, with 4 on 4 play and a 10

minute period.

New Overtime Rule Changes

• Prior to the 2005-2006 season, the NHL further changed OT rules.– There were no more ties.– A shootout system is implemented.

• NHL finally achieves its objective of making OT exciting for fans.

NHL Attendance (1987-2008)

http://www.sbnation.com/2010/1/27/1200854/winter-olympics-hockey-nhl-2010-vancouver