Friday, December 12, 2008

Fantasy Sports - Thinking Outside the Box

In previous posts, I have written about using data analysis and arbitrage (in the non-traditional sense), and how it is talked about in Moneyball and various other books I have read, and how it can effectively be achieved in drafts in fantasy sports...............I have proven this time and again and so have some of the people who I work with. But I had an interesting discussion with my brother (who is usually my arch competitor, but sometimes collaborator in these leagues) about deal making in fantasy sports, the jist of the conversation was that you should make deals sometimes just to make deals, take the bottom runge of your roster and try and trade it for a similar player on another roster, just use it to open the lines of communication, just use it to get the other team comfortable with making trades with you. I thought about this and realized how this is a really good idea,.............but at the time I was told this, I really didn't join another thought, that was told to me by a different owner............another owner told me of performing pure arbitrage (flipping one player who you have just acquired for another asset and making a profit, ie, trade player C for player B and then trade player B for player A from another team)............this owner told me that it is almost impossible to immediately flip someone, because you have to think that they would've just made a direct deal with the other owner. At the time, being someone who thinks markets are at least semi-efficient, I thought this to make perfect sense.......................but then I got to thinking about it and realized this thought is severely flawed, for several reasons.........

1) Owners may not value all commodities equally. Being someone who uses data to calculate absolute values, at least for the first 2 months of a baseball season, barring major injury or major change in playing conditions (ie playing time severely cut or increased), I have a static value for each player, BUT, this might not be the same value other owners place on a player, so in my mind, in the trade highlighted above where player A may clearly be the best available player, the first owner I deal with might think player C is the most valuable and he may also think player B from his team is more valuable than player A from another team.

2) Not all owners are aggressive in dealing, I have a few owners in my leagues that NEVER offer trades, I mean NEVER, unless it is a draft pick trade, they don't really offer trades, they get their ESPN Insider subscription, read a few sleepers, draft their same old starting pitchers, fill it in with guys who had great fantasy value about 5 years ago and they are finished, never to be heard from again.................but, if you can get ahold of a player in a deal that they really love, you can flip that player immediately for instant value.

3) Personalities, in fantasy sports you are dealing with other owners and their personalities come with them, and possibly the two teams that should've made the deal, don't for some reason other than the fact that the deal makes sense............

So I have taken both bits of advice and decided to make some deals of equal value, just to get the communication lines open...............more on this later.

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