you mentioned before that you try to get players for an average of $2 under their inflation price, I was wondering if you might explain how you arrived at this figure? Also, how does your keeper list factor into this? Thank you.The $2 amount isn't based on any kind of mathematical analysis (and I hope I haven't given the impression to any of my readers that it is). Rather, $2 is where I'd feel very good about buying a player if that's where he fell under my bid limit.
Let's say that you have a $30 bid limit on Carlos Lee and inflation in your league is 20%. That would put Lee's inflation par price at $36. If you bought him for $36, you wouldn't be too happy. Paying Lee's par price is dragging your team down via inflation. If you buy an entire team of players at inflation par, you're probably going to lose.
If Lee goes for $35, that's better. You might not want to pay that price depending upon your circumstances, but if you shave $1 off of your inflation par bids on every player, you're probably going to be in a stronger position than all of the other owners in your auction.
If Lee's sitting at $33 and the auctioneer is saying "Going once", you had better say $34 without hesitation. There aren't too many opportunities at auction to get a $2 bargain, so you had better take it.
As far as keepers go, the more money you have frozen, the fewer bargains you will theoretically need (assuming that your freezes aren't high salaried players that you're keeping for the sake of keeping them).
Let's look at three teams in a hypothetical league with 20% inflation:
Team A has $60 frozen in salary on $100 worth of players. He has $200 to spend. If he spends inflation par, he will buy $167 worth of stats at the auction and have $267 total value on his team.
Team B has $110 frozen in salary on $150 worth of players. He has $150 to spend. If he spends inflation par, he will buy $125 worth of stats at the auction and have $275 total value on his team.
Team C has $160 frozen in salary on $200 worth of players. He has $100 to spend. If he spends inflation par, he will buy $83 worth of stats at the auction and have $283 total value on his team.
Note that all three teams have $40 of profit in their freezes. But because Team A has the most money to spend, every dollar he spends in the auction has less value due to the inflation rate.
Every team wants bargains, but for Team A obtaining those bargains is more important than it is for Team C. Team C could probably average $1 bargain per player bought in the auction and field a competitive team. Team A would have a good team if he did this, but would probably fall short in the auction if this was the best he could do.
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This is an amazing site. I agree with whoever commented that you have enough content here for a great book on fantasy baseball auction strategy.
Two related questions sparked by recent posts. First, you've noted that while the greatest "profit" is usually on lower price players, you can't spend all $260 just on low priced guys. Have you ever gone back and modeled two strategies as to their profit potential: a) Try to get players for $2 under inflation par, regardless of their price, b) Spend up to inflation par for the most expensive players, then buy more very low price players who have higher profit (aka, scrubs and studs).
Second, one thing I struggle with when I try to post-mortem my draft performance is the concept of "the winner's curse" -- the idea that when everyone has a different estimated value for an object, the person to win that at auction is likely to be the person who is overvaluing it the most. In terms of Roto, my drafts always look good in retrospect viz a viz my estimated prices, because I'm using them to guide my draft, but I've got no idea whether they are really better than others' estimated prices.
I'm curious how you take that into account in auction strategy.
Everyone should have a different estimate of the players worth based on your keepers. If I have two capable closers I have closers values less since I only want them at a hefty bargain. I use a little program I wrote to change players values during an auction. I want to leave an auction with 80% of what it takes to win a category. My program changes prices as needed. If I purchase a big hitter and am lowest on speed it values stolen bases higher. If U have a low team BA it values high batting average guys higher. You just need to hit your marks, not guess what a player should go for.
Winners curse is actually an easy strategy. You most likely wpm because you traded all your undervalued players for overvalued ones. So you keep the best stat makers even though they are at or over value. Take the stats and concentrate on super bargains from day one. Only two things can happen. You either hit the jackpot and repeat or your are that much further ahead in building for next.
Just remember to always zig when everyone else is zagging.
What I want to talk about are the facts of fantasy baseball in preparing for an auction.
There is only a certain amount of money to be spent. For instance if you have a ten team league at 260 a team you have 2600. You subtract who is kept and all the available players should equal the amount left. That is how you value a player. All the players can't go higher than the amount available.
Also you can predict the postions. If you use nine pichers you can see that 90 pitchers will be bought. No more willbe bought so why list more?
I first read about this in the early 90's. It hasn't changed.
Mike, great stuff. Does the analysis here get a mod if the inflation is, for instance, much higher than 20% (in a 10 team, AL only, keeper league)? The software suggests an inflation of 201 or 101%, which seems not possible, but even if is 40% and I aim for buying players at below inflation par (I have 188 to spend - I inherited a team - with 47 software perceived profit)would I have to aim for buying at maybes $4 below par or something like that? And if so, am I likely to get a bunch of good values but middle of road players and middle of road finish? I suppose I could play for next year, but that is not my style.
Just a follow up to the post today, in trying to gain players for $2 under the inflation value, what happens then if you get a star player for $2 under and pay $40 for him, is this the equivalent of getting two $20 players each for $1 under? Would it then be better to attempt to get two $20 players each at $2 under or perhaps four $10 players each at $2 under? I am a little perplexed in how this plays out based on the value of the player.
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