Revisiting dollar allocation

To think that, recently, I felt like I was running out of things to write about.

sas4 is one of the veteran posters/lurkers over at Alex Patton's discussion forum. Like Mike Fenger, he is the type of reader/commentator I was hoping to attract to Roto Think Tank: the kind of owner who is more of an expert than many of the web site experts who are getting paid good money to spout opinions of a very general nature.

Yesterday, I wrote a reply to sas4's idea that spending 80% of your money on hitting is perhaps a window into Stage 4 of Roto. Today, he provided two long responses to that e-mail that are so wonderful that instead of responding in a very long and probably boring post, I'll respond in a series of short and probably boring posts.

First up:

In our league you still must have solid pitching to win; but keep in mind it is relatively cheaper since everyone is piling on offense.

I agree.

Earlier this winter, I discussed this very concept. Leagues as a general rule spend $175 on hitting on $85 on pitching per team, or $2100 on hitting and $1020 on pitching in a 12-team league. However, if your league spends $208 on hitting per team, you will have to adjust your bids. If you don't adjust your bids, you will wind up spending something like $130-140 on hitting since your hitting pool will have $396 less in bids than your opponent.

Inflation drives this concept to even more radical heights.

Let's look at League A and League B. Both are A.L. only leagues. League A spends $2100 on its hitters, or $175 per team. League B spends $2496, or $208 per team.

League A has its auction first. I go in with my Patton $ bid values. Derek Jeter has a bid limit of $30. Inflation is 20%. My limit, therefore, is $36. Derek goes for $37. His price is $1 over par.

The next day, in League B, the same Derek Jeter has a bid limit of $36 for the same stats, since League B spends 18.9% more ($2496/$2100) on hitting. If League B has the same 20% inflation factor, Jeter's inflation price is now $43. If he goes for $37, I've got a $6 bargain, not a $1 loss.

If I'm stubborn and refuse to adjust to the reality of League B, I'm going to be sitting on my hands on hitter after hitter. I'm also going to quickly fill out my pitching staff, since my $28 Daisuke Matsuzaka is this league's $17 Daisuke Matsuzaka, since this league spends 38.9% less ($624/$1020) on pitching. League B's 20% inflation factor still leaves D-Mat at $20, or $8 short of my uninflated price! I might feel great about D-Mat at $21, but I'm overpaying in League B. And if I overpay for 9 pitchers, I'm quickly going to spend $100+ on pitchers right out of the gate.

In League B, I'm forced to tweak my bids to match League B's typical spending pattern. However, in a league that deviates this significantly from $175/$85, I'm willing to bet that:

• Stud pitchers aren't being discounted as much as the guys in the middle and the scrubs. My $42 Johan Santana in League A probably isn't being discounted to $26 in League B. Someone in League B is most likely spending $30-35 on Santana and filling in his staff with a bunch of scrubeenies.
• on the other side of the diamond, stud hitters aren't being upped universally by 18.9%. A $41 Carl Crawford in League A is now a $49 Crawford in League B. That's fine, but the 20% inflation factor makes Crawford a $59 player in League B. $208 hitting budget or not, teams inherently shy away from putting $59 worth of beans into one player due to injury and/or performance risk. My inflation bid in this league probably is closer to $53 or so. The extra dollars get spread elsewhere.