"Crazy" Inflation

During my 20+ years of playing Rotisserie Baseball, most leagues I've participated in have had anywhere from a 15-25% inflation rate. There was a league I played in that had a higher rate that ranged from 30-40%, but this was the exception and not the rule. For the most part, I'm used to the lower inflation rate and dealing with this rate is definitely within my comfort zone.

Right before the season started, nwhorton nearly made me fall over when he said...

The inflation (in my league) this year is 92.3%!

Yikes! Or, alternately, ick!

To put this into perspective, my "regular" A.L. had a 27.8% inflation rate heading into this year's auction. There was $1764 to spend on a projected $1379 worth of talent. If nwhorton's league had had the same amount of salaries frozen, he would have had a mere $919 worth of talent to buy.

I'm not sure why nwhorton's inflation rate was so high, and it would be an entirely speculative exercise attempting to figure it out. What I am curious about is how an inflation rate like this might impact bargains and busts in a typical Rotisserie League.
Ten Most Expensive 2009 A.L. Hitters To Date

#	Player	$*	Sal	+/-	Sal * 1.25	Sal * 1.92
1	Grady Sizemore	$14	$41	-27	$51	$79
2	Miguel Cabrera	$32	$38	-6	$48	$73
3	Mark Teixeira	$27	$38	-11	$48	$73
4	Carl Crawford	$45	$36	+9	$45	$69
5	Ian Kinsler	$32	$36	-4	$45	$69
6	Josh Hamilton	$11	$35	-24	$44	$67
7	B.J. Upton	$12	$35	-23	$44	$67
8	Dustin Pedroia	$28	$34	-6	$43	$65
9	Nick Markakis	$23	$33	-10	$41	$63
10	Evan Longoria	$35	$33	+2	$41	$63
	Average	$26	$36	-10	$45	$69

*RT Player Rater: 6/4/09, 5x5, 70/30 hitting

The average salary is the 2009 average between the CBS Sportsline, LABR, and Tout Wars expert leagues. The inflation figure makes the broad (and likely wrongheaded) assumption that the inflation price is 25% of the average salary in one example and 92% in the second example.

When you're paying any kind of inflation price, the likelihood of taking a loss increases. A $2 profit (to date) on Evan Longoria in a start-over league turns into a $6 loss in a league with 20% inflation. However, this is probably a loss you can live with if your freezes are even only halfway decent. If your team is $30 undervalued going into your auction and you take a $6 loss on Longoria (and spend about a quarter of your non-freeze budget on him, assuming you froze $100 of salary), then you can live with that.

In a league with 92% inflation, this probably isn't possible. True, profits across the board are higher, so taking a $28 loss on Longoria is probably eating into $100 worth of profits and not $30. However, the problem isn't Longoria but someone like Teixeira. Taking a $21 loss on Teixeira in the league with 25% inflation will hurt but it probably won't sabotage your season. Taking a $46 loss on him in the league with 92% inflation probably will.

Why? Isn't inflation all relative? If Player A earns $40, and Player B earns $30, and Player C earns $20, won't it all come out the same in the end?

On a grand scale, yes...your league's books on the whole will balance out. But here is the problem:
81-90 Most Expensive 2009 A.L. Hitters To Date

#	Player	$*	Sal	+/-	Sal * 1.25	Sal * 1.92
81	A.J. Pierzynski	$13	$10	+3	$13	$19
82	Jorge Posada	$17	$10	-7	$13	$19
83	Travis Snider	$5	$10	-5	$13	$19
84	Ty Wigginton	$2	$10	-8	$13	$19
85	Dioner Navarro	$0	$10	-10	$13	$19
86	Brandon Wood	$1	$10	-9	$13	$19
87	Luke Scott	$23	$10	+13	$13	$19
88	Kurt Suzuki	$11	$9	+2	$11	$17
89	Jed Lowrie	-$3	$9	-12	$11	$17
90	David Murphy	$6	$9	-3	$11	$17
	Average	$8	$10	-2	$12	$18

*RT Player Rater: 6/4/09, 5x5, 70/30 hitting

Since there are 168 hitters purchased in a typical 12-team, A.L.-only Rotisserie League, this group of hitters is a broad representation of the average hitter on the market this spring. Like the 10 Most Expensive hitters, this isn't a happy group. Wigginton, Navarro, Wood, and Lowrie are almost complete losses, while Snider and Murphy aren't much better. Without inflation, I'd want the $36 hitter who only earns $26 after the $10 hitter who earns $8, even though I know that I'm getting a better ROI on the $10 hitter (80%) than on the $36 hitter (72%).

However, in a league with a 92% inflation rate, I'd rather spread the wealth and take my chances here. I might turn a profit on someone like Luke Scott or come pretty damn close on Jorge Posada. The best I can do with in the first list is take a $24 loss on Carl Crawford.

Like a lot of the advice that appears in this space, your own league and your own team have to be taken into consideration. If you're in that league with 92% inflation and have $150 in profits, buying a big star at $60 or more might be the right play for you.

Generally speaking, though, you're going to lose money hand over fist and surrender your advantage in leagues with high inflation if you push too hard for the superstars. You have to spend your money, but given that you're definitely going to lose money in the top tiers, you might be better off picking your spots and trying to underspend inflation by anywhere from $3-7 in leagues with severe inflation, depending on how severe the inflation is and how much your league's pricing fluctuates from player to player.