What Defines a Market in Ottoneu?

The Ottoneu Slack Community is a great source of interesting debates on Ottoneu-specific topics and another was sparked today by this exchange:

Manager 1: What is record for trying to get an RP at auction without success? I am on my 6th nom.

Manager 2: Depends on if you’re trying to get them for $1 or bidding to win.

Manager 1: Nope, bidding market value or higher.

Managers are left anonymous here because a) it doesn’t matter and b) I want to be clear that I am not picking on or attacking anyone. We have all been in manager 1’s shoes, trying to fill a spot and failing, while feeling you are doing what is needed to get an auction win. But it does open up an interesting topic on “market value.”

According to Wikipedia, Market Value “is the price at which an asset would trade in a competitive auction setting.” This is convenient for us because Ottoneu uses a competitive auction setting. This simplifies things for us: a player goes up for auction and his market value is the price he is paid as a result of that auction. That’s pretty straight-forward, and it explains why there was a lengthy discussion after that last comment from Manager 1. If he were bidding “market value or higher” he would be, by definition, winning those auctions.

He later clarified that he was bidding, “Market value as in average salary or $1 of $2 above.” The key here is that average salary isn’t really directly related to market value. It is something of an aggregated market value, I suppose, but Ottoneu Average Salaries don’t really reflect any market.

If you look up “market” in Merriam-Webster, you get a bunch of definitions that share something in common – a market is a category of buyers, a meeting of people to buy and sell, the people at said meeting, etc. It requires a specific set of people taking a specific action of buying and/or selling, or bidding. Ottoneu, as a whole, is not a market. There is no auction in which every single Ottoneu manager is bidding on a player. So while those Average Salaries reflect data aggregated across all Ottoneu leagues, they don’t represent a market.

Instead, each league is a market. And markets can vary pretty widely. We know this from real life. The median home price in one city won’t match the median home price in another, because they are different markets with different conditions and different buyers. The same applies to leagues. Each league is its own entity.

Going back to that average value data and looking at relievers (since that is where this started) the highest average salary for a reliever is $20.17 for Josh Hader. But his prices across leagues range from $7 to $37. That is a huge range! Even if we only look at one league type (let’s look at 4×4), Hader’s still the highest average (at $15.32) but there is still a range from $9 to $27. We lose some outliers, but there is still a manager out there with a Hader that costs him 3x what he costs another manager in another league in the same format.

Looking at my three 4×4 leagues, the top prices show some of this variance: In one league, there are only six RP that cost $8 or more, but two of them are $17 are piece. Another league has ten RP at $8 or more, but none over $12. The third league has 12 RP at $8 or more including one at $13. There aren’t wild fluctuations there, maybe, but those are three different markets.

In that first league, if I want an ace reliever, there is a chance I am going to be made to pay up, in a big way. But if I can step down a tier, I’ll get a much better deal. In the third league, I won’t likely have to pay that huge price for a stud, but I also can’t count on getting low-ish prices on even the next tier down.

The lesson, as always, is to know your league, and prepare your bids accordingly. Looking at average salaries for a player is an interesting way to get a sense of the player’s value across a broad audience. It isn’t a bad way to crowd-source his actual worth to your team. But if you want to bid-to-win, you should look at your league to estimate the market value.

This can mean looking at other similar players, but I would suggest going to look at recent historical bids on similar players, rather than looking at prices for similar players. The thing about markets is they fluctuate. Going back to our house analogy, if you want to buy a house and look at the average sale price of every house on that block, you get some useful data, but there is a lot of noise there. Two similar houses on the same block should have similar values, but their sales price won’t look similar if one was bought a decade ago and the other last week.

In the same way, if you are bidding on an exciting relief arm today, how much a similar reliever cost in March or April just isn’t useful data. At least not as useful as what bids came in on a reliever last week.

Personally, I prefer to bid what I think a player is worth, and only win if that happens to be above market value. But sometimes I just need a SP, or a 3B or an extra MI, and I want to win. In those cases, I look at recent auctions for similar players, use those to predict market value, and boost my bid above that.