### NHL teams strategize when to play for overtime

Here's an article I found a year ago in the Journal of Sports Economics, but didn't get around to writing about until now.

It's by Michael Lopez, and it's called "Inefficiencies in the National Hockey League Points System and the Teams That Take Advantage."

As is well-known, NHL teams have an incentive to get games to go to overtime. If a game is settled in regulation, the winning team gets two standings points, while the loser gets none. However, if a game goes to overtime or a shootout, the winning team gets the same two points -- but the losing team gets one point too.

An overtime game is better for teams, in general, because they get to split three points between them instead of just two. So it's no surprise than NHL teams respond to the incentive. In the first thirteen seasons after the "loser point" rule was adopted, the frequency of overtime games jumped from 20.2 percent to 23.6 percent. (Coincidentally, it's the same 23.6 percent before and after the shootout was adopted.)

Lopez's paper was able to quantify two new additional findings:

1. Games are more likely to go to overtime later in the season than earlier; and

2. Games are more likely to go into overtime when teams are not in the same conference.

These make sense, intuitively. Later in the season, some teams are fighting desperately for a playoff spot, and the extra standings point is much more important for them in terms of leverage. And, whether a team makes the playoffs depends only on the other teams in its own conference, so sharing an extra point with an other-conference opponent doesn't cost anything at all. (Well, maybe it might, rarely, cost home-ice advantage in the finals, but that's highly unlikely.)

As mentioned, 23.6 percent of games went to overtime in the shootout era. But the overtime percentage varies substantially by situation:

**25.4% Inter-conference games**

**23.2% Within-conference games **

**22.0% September-December games**

**23.8% January-February games**

**25.6% March games**

**29.3% April games**

The conference difference is only significant at p=.08, but the month difference is significant at p=.001.

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But, Lopez found, the differences are actually larger than those raw percentages, because the two situations aren't independent. As it turns out, the NHL tends to schedule within-conference games late in the season. That's for drama, so that the most meaningful, high-leverage games are likely to be against historical rivals.

Because of that, the two effects partially cancel each other out. The late-season effect tends to increase overtimes, but those games tend to be within-conference, which decreases them.

Lopez separated out those factors with a regression. Calculating from his coefficients, and assuming teams of equal talent, I get:

**23.5% within conference, early in season**

**26.2% different conference, early in season**

**31.8% within conference, April**

**35.0% different conference, April**

So, the differences are a lot bigger than the raw numbers show.

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Something else that's interesting: the "within conference" effect is very recent.

The overall conference effect was 2.7 percentage points (26.2 versus 23.5). But, almost the entire effect came from the last two seasons in the study. For the study's first twelve years, there was almost no difference at all, on average. But in 2010-11 and 2011-12, the conference effects were 4.7 and 5.8 percentage points, respectively.

It's like teams suddenly caught on to the idea that they don't want to give points away to conference opponents.

But ... well, it seems to me that strategy doesn't really make a whole lot of sense.

Yes, it's true that you don't get an advantage against your rival by playing for three points instead of two. It almost seems like it's worse -- if you win in overtime, you only gain one point on your opponent (you get two, they get one). But if you win in regulation, you gain two points! Except that it's symmetrical ... if *they* beat *you* in overtime, they only gain one point on you.

The disadvantage comes not from any negative expectation -- it's symmetrical, after all -- but that the other-conference games come with a *positive* expectation. You share three points instead of two, but your opponent's gain is not your loss, so the more points to split, the better.

So, against that particular opponent, the inter-conference overtime game is much better for you, with 50 percent more points up for grabs, and no penalty for the points the other team takes, beyond your disappointment at not getting them yourself.

The problem, though, is: that's only true for the one team you're playing against. But, you're not just competing in the standings against this one particular opponent. You're also competing against the other 12 (West) or 14 (East) teams in the conference! If you can raise the expected payoff to 1.5 points each instead of 1.0, you break even against the one same-conference opponent, but gain an expected half point against at least 12 other teams!

Sure, there's *a bit* less incentive within conference, because you stand to gain on only 12 teams, instead of 13 teams when you win an inter-conference game. But, that's so small a drop in incentive that you shouldn't even see it.

To repeat an analogy I've used in the past: If you see a $2 coin in the street, you'll pick it up. If it's only a $1 coin, sure, you're less likely to pick it up, in theory. But, in practice? You'll still pick it up so often that nobody will be able to tell the difference. It's like a 99.99% chance compared to a 99.98% chance, or something.

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Also: why should there be a March/April effect? Every game counts equally in the standings. A November game is just as important for making the playoffs, on average, as an April game.

Of course, in April you *know* how important the game is, whereas for a November game, it might, in retrospect, turn out to have been meaningless. But, since games count equally, the overall leverages have to be the same. If that's the case, then for every absolutely crucial April game, there must be an offsetting meaningless one, in order for the April average to equal the November average.

I wonder if the April effect applies only to the most important games. Maybe teams are thinking, "well, we feel a bit weird lowering our intensity to play for the regulation tie, so we're only going to do it when it's really, really important." In other words, the probability of overtime doesn't increase smoothly with leverage -- instead, it takes a big jump when the pressure to gain points is exceptionally high.

Maybe I'm 100% willing to steal food if I'm on the brink of starvation, but I'm not 50% willing to steal food if I'm only halfway to starving. In the latter case, the risk isn't worth it.

It could be the same thing here. Maybe teams aren't willing to play a less intense strategy (or whatever they do to play for overtime) when it's an ordinary, early-season game. But, when it's *really* important, that's when it's worth the trouble.

Labels: economics, hockey, loser point, NHL, overtime