The Ottoneu Inflation Reduction Act

Google’s AI Overview on the search “what is inflation” (proper grammar not necessary) is:

Inflation is when prices of goods and services increase over time. It’s a broad measure of how much more expensive things are becoming.

In Anthony Clark’s Economics Through Everday Life, he writes:

The presence of inflation simply means that prices on average are rising.

This time last year, Chad Young wrote:

Inflation is simply the increase or decrease in average player price you can expect as a result of the relationship between amount of money spent on keepers and the amount of value those keepers represent.

Let’s use a few of the FanGraphs Staff II keepers as examples of how this all plays out to cause inflation in Ottoneu fantasy baseball.

Inflation happens naturally over time. In Clark’s book, he compares the price of a movie ticket in 1940 (~$0.25, “back in my day…”) to now ($20+, depending on how big the screen is and how far back the chairs recline). The increased price in the movie going experience is a form of inflation, but wages have followed the upward trend of movie ticket prices, so we’re still going to see movies. The cost has gone up, but so have our wages. In Ottoneu, you may have been rostering George Kirby back when movie prices were a quarter, and now, his salary has gone up due to arbitration. But, your wages didn’t increase. You still have the same amount ($400) as everyone else. That’s not necessarily inflation, but it gives us an idea of how inflation, increased average prices, can be created.

Now, let’s look at the flip side of the Kirby example above. In the FanGraphs Staff II league, several players were kept well below their average value:

Before we review the players above, you’ll notice I’m comparing the price at which the player is rostered with the average price. In economics, which I am no expert in whatsoever, the consumer price index (CPI) tracks average price changes of goods bought by typical households. In a similar way, we can track the change in player average salary. You may have different ways of placing a price value on a player, but the simplest way of calculating inflation in this example is to use average salary.

Now, to the elephant in the room, Team A. Heading into the season rostering four of the game’s top players well under their average salary makes Team A very dangerous for the rest of us. Team B is also scary-looking. If we add up the surplus and group it by team, we see the danger in fine print:

Team A – $31

Team B – $28

Team C – $6

Team D – $12

NOTE: This is a sub-set used for simplicity. If you want to calculate your league-specific surplus values, you’ll need a tool like Justin Vibbor’s Surplus Calculator, or you can simply calculate it by hand on all kept hitters and pitchers. 

Each one of these teams, essentially, has extra cash on hand. Whether your team has a surplus or does not, you will have to assume any of the teams above will inflate the average prices of players at auction. Let’s say team A, with its $31 of surplus, wants to add Mookie Betts, the top free agent by average price ($60) in our league to their already impressive roster. The first question to ask would be, does Team A even have $60 left over for the auction? The answer is no. Team A has a very impressive roster and likely won’t need to go after a player like Mookie Betts. Team A is more likely to inflate the price of mid-level to low-level players. Still, inflate they will. However, Team B does have the cash to make a run at rostering Mookie Betts. In fact, they have $110 to play with, much of which is surplus value. So theoretically, Team B could roster Betts for more than someone who does not have surplus value. If I have no surplus or even negative surplus, I may bid for Mookie at $58 and hope no one notices. But, it’s very unlikely that I’ll win because the other managers with surplus value may be willing to spend much more than that on the man in blue.

Heading into your auction, you must take this into consideration. You can calculate your league’s inflation on your own, or you can pay for Justin Vibbor’s surplus calculator. Doing so will allow you to better prepare for Mookie Betts going well above $60 at auction. If you head into a re-draft with target values that are close to the average without taking inflation into consideration, you’re going to enter the draft with unrealistic expectations. Just like you still have to bring a few extra bucks to the grocery store for that jug of milk that the kids will likely spill all over the table during breakfast cereal time, you’ll have to bring a few extra fake fantasy baseball dollars to the Mookie Betts bidding challenge.