Valuation with Higher Inflation

NSH wants to know if my auction philosophy changes in leagues with higher inflation.

Does the analysis here get a mod if the inflation is, for instance, much higher than 20%...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.

The analysis doesn't change. What does change is that there is typically more variability in bids due to greater fluctuations in each team's inflation par bid.

For example, Owner A believes Torii Hunter is worth $20. Owner B thinks he's worth $23. In a league with 10% inflation, your inflation bid becomes $22, while your opponent's bid is now $25. In a league with 30% inflation, your inflation bid is now $26 while your opponent's is $30.

One dollar per player isn't much of a difference. But when you factor in 12 owners and 276 players, these differences become magnified.

What this means to you is that your odds should actually improve somewhat due to higher inflation.

In Wednesday's post, I told you that if you were trying to buy players at $2 or more under their inflation par bid value you would have only been able to buy 11 players for $96 in 2007 and 21 players for 21 players for $142 in 2008. The inflation rate in 2007 was 17% while in 2008 it was 20%.

In 2006, with an uncharacteristically high 31% inflation rate, there were 31 players you could have bought for a grand total of $412 at $2 or better than under inflation par.

You obviously can't spend $412 on your team. But you should be able to buy a team with a good amount of value on it coming out of your auction if you plan properly.

As far as the second part of your question goes, you should be able to buy some superstars if you want to do so. But you should be careful. There is a ceiling on what players can earn, and high inflation rates mean that at some point you're bidding past what any player can theoretically earn. If Albert Pujols' raw uninflated value is $42 and your inflation rate is 40%, your hypothetical inflation bid limit for him should be $59. Getting him for $55 might theoretically be a "bargain," but you are going to lose money on Albert no matter what he does in 2009.

The players in the middle might be boring, but they won't necessarily propel you to a middle-of-the-road finish, especially because the fluctuation in the middle of your auction should be the wildest. Buying Melvin Mora at $12 might not seem exciting, but if you're getting a perceived $5-7 profit you should be excited.