More Discussion of Auction Price Inflation by Brad Johnson March 23, 2016 How’s that for a clickbait headline? (Not so good). Yesterday’s post on the interaction between keeper values and inflation generated a lot of great discussion. If you’re interested in that sort of thing, I recommend wading into the comments. As one commenter noted, when calculating inflation, the industry standard is to use pre-inflation price times the sum of one plus the inflation rate. Or written another way: Post-inflation price = Pre-inflation price * (1 + inflation %). Said commenter thought I preferred: Post-inflation price = Pre-inflation price ^ (1 + inflation %). I don’t use either formula. But to be entirely honest, my math chops aren’t great. I’m sure they exceed the average American since the media kindly informs us we’re all stupidheads. I digress, the point is that I don’t agree with either method of formulating inflation. Instead, I try to walk a middle line while leaving myself free to make big changes to my draft plan mid-auction. When a league is sufficiently competitive to merit the labor, I hand-calculate my inflation values. First you have to get an estimate of the actual inflation. I usually just do some simple spreadsheet work using the FanGraphs auction calculator. For competitive reasons, I don’t generate my personal valuations using that tool. Still, it’s good enough for making estimates. I only need a rough idea of the surplus value of all keepers. Once I know surplus keeper value, then I know how many extra dollars are in the draft pool relative to the remaining talent. Here’s where you would apply a formula or, in my case, use arbitrary personal values. Here’s how I go about it. First, there are certain high profile targets. Mike Trout is one of them. Maybe you’re enamored with a certain pitcher – I like Dallas Keuchel more than most. A “high profile targets” list doesn’t have to mean the top 15 players in the draft pool, but it probably should only contain high priced players. It could just be the top 15 players. I’ll go above and beyond my price estimate for guys on this list. As it turns out, many of your rivals will too. You’re unlikely to win more than a couple of them. After addressing the most attractive talent, I have a bundle of leftover surplus value. Call it roaming cash. I’ll distribute this based on position and category scarcity as well as my roster composition. For me, they’re my reserve cavalry; I call upon them as needed. For others, they have auto-updating spreadsheets that calculate the value of each player to their current roster. I recommend going this latter route for most serious fantasy players. Unusual Philosophy I have an unusual philosophy when it comes to drafting – I don’t believe it matters who I pick. I mean, yes, it does matter, but our projections aren’t good enough to take a hard and fast approach to valuation. I played with value ranges this winter. If memory serves, I had Giancarlo Stanton worth between $27 and $54 in my home league (pre-inflation). The size of the range diminishes as the quality of player diminishes, but most players carry a very wide set of likely outcomes. It’s common to say that the goal of a draft is to do two things: accrue the most units of production and pay the least for those units. Those phrases mean the same thing assuming everybody spends all of their money. It’s also a shortsighted mindset. Winning the draft is only half the battle. Since we don’t know what will actually happen, I figure I need reasonable projections, roughly accurate expected dollars, and a manageable roster. Few leagues are decided on draft day. Team management, trades, and waiver moves play a huge role in deciding a winner. Picking up the next J.D. Martinez in place of Scrublord McGee can be more important than any draft pick. I’ve played the “stick to my values” game in the past, mostly with bad results. Typically, I find I made some errant assumptions. Last year, too many people used the same projection sources (Steamer and ZiPS) which leads to overlap in valuations. Then you wind up in bidding wars for players only Steamer likes. I paid way too much for Mark Trumbo, and I’ve never even liked him (well, not since he was a waiver add).