Friday, March 19, 2010

My Smart Readers are Getting Ahead of Me

When it comes to where and when you spend your money in a keeper league auction, jem1776 beat me to the punch.
Doesn't it depend on when you spend the rest of your salary cap? What if the inflation in your auction has already been spent before you spend a lot of your remaining money, say stage 1? Or say it's stage 2 and you spend at the beginning when everyone else is holding off for the middle rounds when there will be too much money chasing too little predicted value? What then?
jem1776 is referencing this post, where I talked about how inflation eats into the value of a team. I posited that inflation chews into the value of a team with more money frozen then a team with less money frozen.

Theoretically speaking, this is indeed true. If the league's inflation rate is 20%, the league as a whole will spend 20% more than the value of the players in the pool by the time the auction is over. Taking this logic one step further, a rudimentary way to project how each team will do in the auction can be done by assuming that every team in the auction will see 20% of its value eaten out of its team's value.

However, jem is quite correct that - in practice - this will not happen. Some teams will do a better job than others of spending their money and be impacted less by inflation. As a result, some teams will do a poorer job and be impacted more.

Jem is also correct that it is important to take advantage of the lulls in your auction when they occur. If your calculated inflation is 20% and you think he's worth $30 without inflation, then the inflation par bid is $36. If he's sitting at $32 and the auctioneer says, "Going Once, Going Twice," you should say $33. If someone else says $34, you may or may not want to say $35 depending on how tight or loose your league is when it comes to how close it spends to inflation on the whole.

Likewise, if that $30 player flies up to $40, you don't want to come anywhere near him. Even this is happens 20 times in a row, you still want to keep quiet. Jem is correct. The bargains will come. Whether you get them in the middle of your auction or at the beginning doesn't matter.

There are more advanced principles to this concept that might make you want to pay par inflation value for a player. Generally speaking, though, you want to take the bargains where they come. If you do this, you will be one of the teams that beat the inflation curve and improve your team in your auction as a result.

1 comment:

jem1776 said...

I've seen your stuff here and elsewhere; you don't need to be concerned that your student will get ahead of the teacher.

I asked another this question, but I've gotten no response, so i wonder if you'd help me.

Our auction is in 8 days. One team is head and shoulders better than the rest, then 4 teams closely bunched, followed by 4 teams bunched much further back, then the rest even further back, including me. All from Keepers of course. Here is my major issue in 6 X 6 (std 4 X 4 + K, IP, R, PA) mixed, 67.5% player penetration: The huge front runner has only one topper- Joey Votto. We have 17.26% inflation. I'll have to push Votto to a price that would also buy Abreu, Pedroria, Panda Bear, Youk, Longoria, Derrick & Carlos Lee, Spann, Brandon Phillips, & David Wright. After I push him to that price I estimate that there is a 35% or better chance his natural conservatism may keep the front-runner from pulling the trigger on his topper. The odds are greater he won't if I wait past my first nomination in the third one in the first round, so if I do this it will shape my Draft too. All the others are available also, some with and without toppers attached by other teams. I must invest in some of these guys in order to spend my salary cap, gain enough counting stats, and avoid stage 2 with too much money chasing too little talent. Should I take the risk on Votto to keep his toppers team from running away from the rest of us by the All Star Game? His conservatism shoulod we prove to be in stage 2 will mean he could end the Auction with $20 or more unspent, as he had at least that much left the last time we had a stage 2 auction. On the other hand, Votto is certain to cost that much, while some of the others may not. And there may be even more of the next tier available at less than full price or not should we bleed back into Stage 2, as we have moved from stages 3 and 4 to the unknown because of changes in our categories, format, rosters, and available players for our Auction after 25 years of staus quo. I'd prefer to wait to see which stage we're in, but the die will be cast on Votto after round 1. Also, I think it could be advantageous to keep the league in the dark about which stage we're in, so even though I've been burned every single time I've bought a player following his career year, I suspect toppers on Albert P. will be the first player nominated, so I'm thinking of starting my bidding immediately in the mid-40s to keep the league in the dark as to which stage. We're even on knowledge and experience in the league, but I've never tried to gain the advantage in a big way by my auction behavior. Of course, the danger in making it consistently confusing for everyone is that there are all those teams to make me one by one pay more later for those i obviously want. Have you used bidding mechanisms in auctions, I mean beyond walls, etc. And what would you do about Votto and the others? Time is running out for me: shamefully, it has been 23 years since I last won our pennant.