Tuesday, June 22, 2010

More Tout Wars (and a closer look at the Vickrey Method)

I've written about the Vickrey Method before, but this year is the first time I've ever played in a league that uses this FAAB bidding mechanism. In late April, I shared my two cents regarding the bidding system, but I hadn't really seen it in action to that point (in part because Tout Wars adopted a modified Vickrey this year that only applies to winning bids greater than $10).

I was going to look at the National League - since that's the side of the house I've been playing in this year. However, there have been only a grand total of three Vickrey results, with only one of those containing a bid differential of greater than $5.

The A.L. side of the house has provided far more to analyze thus far this season.

Vickrey Impacted Bids: 2010 Tout Wars A.L.


Julio Lugo4/5$31$9$10AUC

Fred Lewis4/19$43$18$19$9

Alfredo Simon5/3$36$34$35$18$15

Armando Galarraga5/17$16$7$10$12$12

Corey Patterson

Tommy Hunter6/7$16$11$12AUC

Mike Carp6/14$26$11$12$5$4

Conor Jackson6/21$75$58$59$36$27

Dayan Viciedo6/21$31$19$20FARM

One of the arguments that have been made in favor of Vickrey is that it discourages overbidding, as explained in this excellent piece by Mike Lombardo of Wise Guy Baseball.

Overbidding is somewhat less of a problem in leagues using Vickrey Rules. In essence, Vickrey awards players for the second highest bid, plus an additional dollar. If team A bids $36 on a player, and Team B bids $25, Team A gets the player for $26, ($25 + $1). While it does protect overbidders from themselves, it is also leads to some useful strategies. I highly endorse Vickrey for all forms of FAAB bidding.
Yet the results above don't seem to support this idea.

I've added a column for my home A.L. league: the Billy Almon Brown Graduate league. This is an established American League that has been around for over 20 years and has used FAAB for over a decade. Yet our bids are less aggressive than the Tout Warriors, who are using Vickrey.

I would have assumed the opposite of what Lombardo did. Vickrey bidders can put in some fairly fat bids knowing that there's a good chance that their bid will be reduced somewhat. The result in many cases, though, seems to be two aggressive bidders and one high price.

Would the winning bidder in my league have bid $58 on Conor Jackson if he knew there was a chance he could have bought him for less? Maybe, maybe not, but I'm certain that no one bid more than $36 in BABG at least in part because they knew that there was a good chance they'd be spending over 1/3rd of their budget on Conor Jackson.

It could simply be what I'm used to, but the BABG bids intuitively make more sense to me. Jackson at $36 even seemed a little high...but it also seemed like a price that I could justify. Jackson at $75 seems like a lot for a hitter who hasn't produced in a year and a half, league shift or no.


Rotoman said...

The goal of the Vickrey auction is to induce bidders to make true bids. Vickrey's insight was that in a closed auction bidders often underbid the true value of the asset for fear of overbidding and looking foolish. By assuring the bidders that they'll pay just one unit more than someone else bid, they are freer to bid the actual value they give the object for sale.

Which explains why your closed auction bidders spend less than the Tout Warriors. Also, do you allow $0 bids in Billy Almon? That has an effect, too.

Rotoman said...

We changed the Vickrey rules in Tout this year because of my observation that rather limited number of bidders each week meant there were many uncontested bids, all of which were reduced to $1.

This essentially gave teams that lost the fight for the few big players to become available an almost unlimited supply of money. Since we do allow $0 bidding, it seemed to make sense for teams to pay a floor price based on their bid (since these bids were determined more by team need than player value), and use Vickrey for the more in demand players.

We'll have to evaluate whether the $10 floor is the right one, it seems to me now that $5 might have worked just as well, but I think it's definitely made me more thoughtful about my bids each week.