Gaining Rationality: Simple Auction Tables

Last week, our own Brad Johnson discussed unpredictable auction values in “Rationality Will Ruin You”. I 100% agree with his premise. Unexpected inflation exists but so does a solution. By charting out the desired and the potential outcomes before an auction, an owner can remove a ton of auction frustration.

Brad examined the elite player section of the draft where the actual auction values are higher than most people’s predicted values. Owners refuse to pay these high values but instead end up spending their resources on near replacement level talent. The following simple chart helps an owner deal with the problem along with uneven hitter/pitcher mix and outlining a personal auction strategy. The process is similar to the one used in Winning Fantasy Baseball by Larry Schechter but with a few more additions. Here’s the procedure.

Step 1. Get auction values

This step could be as simple as using our auction calculator or creating your own projections like our own Mike Podhozer does. To set the pitcher/hitter mix, use the league’s historic mix or just go with standard 70/30 split.

Step 2. Calculate tiered auction values

Divide the auction values between pitchers and hitters. Then, average the first X hitters where X is the number of teams. On average, each owner will have to buy one of the hitters from this tier. Continue the process for each set of hitters. Do the same procedure for pitchers.

These auctions values are the “Perfect Values”. In a world where everyone acts rationally, the final bid values would all be near these. As Brad stated, the world isn’t rational so, more steps are needed but ideal values set a good baseline.

For my Tout Wars team (15-team, 13 Hitters, 9 pitchers), the tables look like these:

 

Additionally, spend a couple minutes going through your auction values and designate each tier. My values are on paper, so I draw a line between each tier. Then I mark each tier with its number and average value so I can reference the auctions values and team table. For those who have joined the 21st century, just use a different color and/or font to show the different tiers in a spreadsheet like the following.

Step 3. Add your own insanity

With the perfect values added, owners now add in their own plan. The owner isn’t changing their projections, just how they want to allocate resources. Maybe an owner wants a 75%/25% mix. Or it could be they want to spread the risk around and get as many $15 players as possible. They can implement the structure for their plan now.

One item I would add now is starting and relief pitcher slots. If you plan on buying closers, plan on how to distribute the resources.

For example, I am in a league where an owner goes with the stars-and-scrubs approach of spending all his money on top end players, getting drunk, and then bottom feeding after taking a hour break from the process. The following examples are what I expect his plan to look like (if he has one).

 

Step 4. Add in historical league data (skip to 5 if none exists)

With perfect and personal values are added, now owners add in the historical information. If available, this information in invaluable. Does the league spend a higher per pitcher than most? Do the top 24 hitters have a 30% inflation? These values can point to areas in the draft where an owner needs to spend a few dollars more and when the transition happens to undervalued players.

Here are the historic Tout Wars values added to the tables.

 

This table can provide needed insight. If the above owner is set on spending $30 for the hitters, he is going to be purchasing players around his ~$27 perfect values because of league inflation. He should spend some extra time researching these hitters to get the best value.

Step 5. Utilize real-time auction results

Two blank columns to add at the end. The first is the player’s auction value and the next is the difference between the “insanity” value and the actual value. If the stars-and-scrubs owner gets a hitter for $40 in Tier 1, they would need to bring down the rest of their values by a total of $10 to maintain the $260 budget.

Here is an example of the final tables with a player added.

 

Now, the owner is ready for the auction. Besides keeping track of his team, an owner needs to track the individual final auction bids. Look for any trends. For owners in a new league, this aspect is really important. Without the historic values, the inflation amounts will soon become apparent. For the owners with historic data, they can determine if anything fishy is happening like several owners dumping pitching.

For example, here are some final action values. Just by doing a quick eyeball of the results, an owner is likely going to have to spend a couple dollars more to get one of these pitchers.

Finally, if an owner finds the actual costs below his “perfect” pitching projections values, the league’s average split needs to be corrected with the surplus given to hitters instead of pitchers.

By keeping these two simple tables up-to-date during the auction an owner can keep a good handle on inflation and hitter/pitcher splits. They bring needed rationality to any auction.