How Your Biggest Strength Could Be Hurting You

What is your strength when it comes to fantasy baseball?

Is it trading? Draft preparation and execution? In-season management? Identifying likely hitter busts? Or spotting that diamond in the rough pitcher? A lot of us seem to believe we’re adept at identifying those pitchers. Does that describe you? I’ll come back to this later.

Please help me out:

Do you think you’re better at identifying undervalued and breakout hitters or pitchers?

— SmartFantasyBaseball (@smartfantasybb) April 26, 2016

You likely have a strength. And you should know what it is. You want to be able to exploit this strength as an advantage.

Assuming you are aware of your “edge”, let’s take a closer look at how it’s very possible you’re use of that strength might actually be putting you at a disadvantage.

Let’s Get Hypothetical

It can be difficult to critique oneself, so let’s imagine the following hypothetical scenario.

You believe that you are talented at evaluating pitchers and recognizing performance changes. In addition to your strong understanding of pitching metrics, you also follow the work of pitching gurus, like Eno Sarris and Paul Sporer, closely. Between your own skills and the assistance of other experts you are able to identify pitchers with mechanics issues, new pitches, new usage patterns, and with above average arsenals. With the combination of these factors, you believe you have an advantage over your competition.

You put this extreme skill to your advantage by placing a higher than normal priority on hitters early in the draft. You then deploy your pitching skills later in the draft and during the season where you feel more adept at identifying undervalued pitchers and those that will come out of nowhere to perform well.

You believe this lets you earn a competitive advantage in hitting, because you’ve devoted more resources to that during the draft, while not falling behind in pitching, because you can make up for it later in the draft or during the season.

What could be wrong with this approach? It seems like common sense.

Enter the Theory of Risk Compensation

You’re demonstrating the theory of risk compensation (this is also referred to as risk homeostasis and the Peltzman Effect) to a “T”. This theory suggests that people behave differently depending upon the amount of risk they sense in a situation. Because of your talent, you believe there is less risk involved when you draft a pitcher. So you adjust accordingly and put yourself into riskier situations (drafting pitchers even later). Your risk level finds homeostasis.

It may help if I also illustrate the theory with two examples involving helmets (wooohooo, helmets!).

First, let’s assume you’re a motorcycle rider. Now assume you’re a rider in a state that does not require you to wear a helmet. Would you ride that bike any differently due to the fact that you are not wearing a helmet? Assuming you’re not a thrill seeking “invincible” teenager, it’s possible you’d ride the bike somewhat more cautiously if you were not wearing a helmet. This implies you would ride somewhat more recklessly if you were wearing a helmet.

Second, let’s consider the game of football (American). There’s a well-documented concussion issue in the sport (come out from under your rock if you didn’t know this). This is surely affected by the fact that the helmet, the very item designed to protect players from head injuries, also makes them that much more likely to launch their bodies into violent collisions because of the sense of security the helmet offers. Would we see as many full speed head-on collisions if players didn’t wear helmets? That sounds like a crazy idea. I’m surely not suggesting no helmets is the answer to the NFL’s concussion problem. But hopefully you can see that in an odd way, the helmet actually contributes to more violent collisions.

This gives us two examples where the effectiveness of a safety device is mitigated by people then altering their behavior because of the decreased risk of injury.

What Does This Have to Do With Fantasy Baseball?

My wife is always telling me how terrible my analogies are… But your hypothetical ability to identify pitchers is the helmet in the scenarios we just discussed.

That talent rightfully gives you a sense of security. In our example, you truly are significantly better at identifying breakout and undervalued pitchers. The risk you face in drafting a pitcher is not the same risk a typical fantasy manager faces. If you were to select a pitcher ranked in the top 15, we can presume that you would see a pitcher with a safer set of outcomes and/or a higher ceiling than others in the top 20.

That same talent also causes the pursuit of riskier behavior. Instead of choosing that pitcher from the top 15, you might choose one in the top 25 and try to pass him off as your ace. Or you may neglect the top 30 altogether and try to string together a staff.

Can you see how deferring pitching to later in the draft acts to negate the pitching benefit you have? 

Another Terrible Analogy

I’m about to give a loaded example, fraught with logic problems, in which I completely stack the deck to show you what I want. But hopefully you’ll find it instructive.

Let’s assume the typical fantasy manager has a drafting skill that allows them to “hit” on about 70% of their draft picks. Then let’s assume your skill at identifying pitchers allows you to “hit” on 80% of pitchers. We’ll also assume you’re average at drafting hitters, so you can accomplish the same 70% “hit” rate on hitters.

You could choose to apply that 80%-to-70% advantage in the early rounds of the draft when the projections on players suggest dollar values in the $10-$20 price range.

Or you can wait on pitching, pushing those picks off until later in the draft. But at that time you’ll be selecting from pitchers that have projected values that are much lower, maybe only in the $5-$10 range.

This is what a lot of us do. And I think it illustrates the theory of risk compensation perfectly. We take what could be a strength and minimize its effectiveness.

The Counterargument

There are some holes in that analogy. My wife is onto something…

The first problem is that we know pitching to be a more volatile investment than hitting. To some extent this volatility is already priced into each player’s projection. A pitcher projection that calculates to be worth $15 is the amalgamation of many different outcomes, some good and some bad. Those different outcomes are included in the $15 valuation already. But we’re not able to model very well the fact that pitchers selected in the late rounds (Vincent Velasquez, Jose Berrios, Jason Hammel) might earn $15-$20 if they hit the peak of their projections. And if they flame out we can cut them and move on.

Another fallacy to be mentioned is that our perceived skill at identifying breakout pitchers may not truly be an 80-to-70 advantage in the earlier rounds. Perhaps we only hold that advantage in the later rounds. It’s certainly possible. A lot more is known about the pitchers that are projected to earn $15-$30. It seems that the skill in identifying breakouts has more to do with the unknown and being one of the first to recognize a new skill that has appeared. That doesn’t seem to happen as much in higher valued players. Although I will say that those elements could still exist. Perhaps a $15 Garrett Richards becomes a $30 pitcher with his uptick in velocity. Or a Noah Syndergaard goes from a $20 projection to a $35 star with the advent of his 95 mph slider.

I’m getting off track here. I don’t want this to become a volatility, valuation, draft strategy discussion.

I simply want to plant the seed that we may not be deploying our advantages in the ideal manner.

Another Reason Your Advantage Could Be Hurting You

Could it be that we’re really not as good as we think?

Remember that Twitter poll I included earlier in the post?

Please help me out:

Do you think you’re better at identifying undervalued and breakout hitters or pitchers?

— SmartFantasyBaseball (@smartfantasybb) April 26, 2016

I had a hunch the results might be something like that. And this adds another layer of danger to the situation, in addition to the risk compensation problem.

You see, the majority of us (or at least the majority of my Twitter followers) think we’re good at identifying pitching.

Can it really be an advantage to all 75% of us that think that way?

If we dove into years of transaction data for that 75% and all of their competitors’ transactions during the same time period, I’m guessing we could develop some kind of bell curve illustrating that it’s really only a distinct advantage for about 15% of us.

There are a variety of reasons so many could feel this way.

Some could be legitimate… Due to having more per pitch metrics, we can use sample sizes from pitchers before we can use them for hitters. We can use PITCHf/x data to identify velocity increases, repertoire changes, and new pitches.

Others could be mental biases… The natural volatility of the position could make us more susceptible to thinking things that really aren’t true. We remember the Vincent Velasquez pick this year but we forget about drafting Jeff Samardzija in 2015.

Another thing to consider is that really good pitching information, from guys like Eno and Paul, is widely accessible. Even those that aren’t skilled at this themselves can digest that information and erode that significant advantage you might have.

The bottom line is that we can’t all have an edge at identifying breakout pitchers. Being “good” at it isn’t enough. It’s only an advantage if you’re better at it than others.

Be Careful Out There

Believing you have an edge and acting on that without really understanding if it’s truly an advantage is dangerous. More likely than not you’re falling to some sort of cognitive bias that’s just leading you to believe you’re better than you really are.

Couple that with the theory of risk compensation and you could seriously be hindering your ability to succeed.

In essence, it’s very possible that we don’t have the advantage we think we do. And to compound the problem, we then commit to even riskier behavior (putting pitching off until later than others) that can put us even further behind.