The biggest challenge with addressing the tanking problem is that the NBA draft lottery creates a natural trade-off between its effect on competitive balance in the league and on teams incentive to lose on purpose.
If I were in charge of the NBA draft lottery I would wait until the end of the season and then randomly select a number between 30 and 60. I would use the current lottery system but base the lottery on each team’s place in the standings after that randomly chosen number of games.
By way of example, we ran a simulation using last season. The number we randomly drew was 43. So that means we'd assign teams lottery balls not based on their record at the end of 82 games, but instead based on their record after Game 43.
It would change things somewhat, as you can see in the table. The current system really hurts teams like the Wizards and Raptors, who continued to play rather well during the last part of the season.
The table is not meant to provide evidence that teams like the Magic and Trail Blazers were tanking, but it does highlight how much teams can improve their lottery chances under the current system by losing more games at the end of the season.
This would reduce the incentive for teams to lose on purpose late in the season once they drop out of contention for the playoffs because regardless of which number is randomly drawn, any losses after game No. 60 -- usually played in late February or early March -- would have no bearing on a team’s chances in the lottery. At the very least, this would drastically curtail “tanking season,” assuming any team would want to pack it in much before the All-Star break.
In order for this approach to be as equitable as the current system requires, a team’s league ranking at a point mid-\season is correlated with their ranking at the end of the season. I took a date from seasons between 1991-2010 and find that there is an 88 percent correlation between a team’s rank after 30 games and their rank at the end of the season (with the average team moving three places in the ranking). If you wait until after the 60th game, the correlation increases to 97 percent (with the average team moving 1.5 places in the ranking).
Joseph Price is an assistant professor of economics and Brigham Young University. His research has often covered basketball topics, including incentives and league policy, interracial workplace cooperation in the NBA, performance under pressure and referee bias.