The New Orleans Pelicans and Jrue Holiday are engaged in public and private negotiations on Jrue’s next contract. Negotiations are a game, which means they are often improperly analyzed, particularly in a market that is not free and inefficient. Let’s look at this negotiation and negotiations in more generality to see what we can learn, and why I think the Pelicans are going to sign Jrue to a deal averaging about $28.5m per season.
Special thanks to Nick Lewellen (@nicklewellen) for some economics and auction chats. A fine economist.
The Game
It is easy and incorrect to say that Jrue wants to earn the max and the Pelicans want to pay the minimum.