Friday, March 23, 2007

Answering Some Questions

First two quick answers to questions people have posted in the comments section recently:

1. Players (like Alex Gordon) who aren't currently in the Rotohog 'universe' will be added shortly after drafts end at a price determined by the Rotohog staff to be 'fair'.

2. The folks at Rotohog have been very careful NOT to answer my questions about the spread and other details of the trading and pricing mechanism. We're just going to have to wait and see. If I had to guess, I would think the spread will be larger on highr priced players, but obviously my strategy depends on it not being too large. That said, I think there will be lots of trading opportunities to make money, so some variation of my strategy should work regardless.

Now, onto a couple things that somebody said in the comments yesterday that I think may represent common misconceptions:

Had there been a pitcher whose cost was $100, the cost per anticipated point would be points/100. Each start should account for approximately 3.5% of the year's production. (It's obviously not a smooth curve, but over the course of the season...) For the second game, if there were no change in the price, the value would be points (.965)/100.

That's not right. At any given time, the total value of all players in the Rotohog universe by definition is equal to the total amount of Rotohog dollars. Since you don't get bonus points for having money at the end of the season, there's no reason to 'hoard' money. You spend whatever you have to get productive players. So all else being equal, player values would be the same at the end of the season as at the beginning. Of course, all else is not equal, because each time there's a transaction some money will disappear from circulation forever (the transaction fee/spread) there will be some deflation, but not as extreme as what happybooker is implying, and I believe it will have the least impact on star players...if anything their prices may increase as more people become aware of the strategy of rotating players.

The other part of his comment that I wanted to address is this:

If a top performer, say Santana, has a great opening game, the price should fall the day after. If he has a normal deviation relatively weak start, the price should stay the same or rise marginally.

That's not how things work. If you project Santana for a 2.50 ERA for the season and he get bombed for 10 runs on opening day, you don't assume he'll now pitch 2.20 ERA baseball for the rest of the season to get him to 2.50 for the season. You have to assume that he'll pitch 2.50 ERA ball and end up somewhere around 2.80 for the season. To give an example of the same principal...when you flip a coin and it comes up heads three times in a row, is it more likely to come up heads or tails on the next flip? His comment suggests that he might say 'tails, since it needs to end up 50/50 overall'. That would wrong though - its still 50/50 on all future flips.

By the way, I now know who I will selecting with the first pick in the Rotohog draft. If you've been reading this blog carefully, you should know too. If not, I'm willing to let you know if you send me an email at telling me that you'd like to be added to my blog mailing list (which is for this blog and my other blog The Waiver Wire. Let me just say that if you're drafting next Monday at noon Eastern and you end up in my draft, you're going to have to be very, very fast with your first pick if you want the same player I do. So you may want to steer clear of that time for your draft.


Happybooker said...

Let me try it another way, this time from the perspective of the underpriced player on one hand and the 'fairly' priced bottom dweller. Let's use Delmon Young ($2) and Willy Taveras ($4) as examples.

Young is a rookie who has had 'character issues'. But any reasonable translation of his minor league numbers within the scoring confines of Rotohog leads to a conclusion that he's underpriced. His production should yield between $15 and $20 worth of production when taken over the course of the year. He's a reasonable place to put money in the initial draft with the intention to buy and hold.

Taveras, OTOH, is a proven commodity. No power, high steals, no RBI, some runs and an empty batting average (i.e. not much different than his OBP). At $4, he's a reasonable placeholder of an outfield slot but shouldn't have much appreciation.

Now,let's assume that both Young and Taveras go on a tear in April. Both hit 10 HR and pick up the peripheral stats (like RBI) that go with them. My course of action for the two players would differ radically. I'd treat Young as a buy/hold commodity, planning to review him seriously at the All Star Break. On May 1, I'd sell Taveras so fast that your head would spin. He would have accumulated my $4 worth of points and then some. There's no reason that I'd expect that his production pattern would be different at the end of this year than it was at the end of last year (except that he'd already have 10 times as many homeruns). Can you say "Chris Shelton" and "regression to the mean?"

It seems to me that the key to production is to get the most benefit per dollar over the course of the season. That would mean being wary of predicted top producers later in the season if their price approaches what their auction day cost was.

Steven said...

2 quick questions someone might be able to answer:

1. Are price changes going to depend only on action on the trading floor, or will the drafts affect prices too?

2. What players will initially be on the trading floor? Is it just every player that wasn't drafted, or will they throw in extras of guys who were drafted? I assume there's got to be extras, since otherwise prices couldn't rise too much.
If so, how many - a finite number, or will the supply be unlimited, just with changing price?

Alex said...

steven - I'll take a shot at answering those.

1. In theory, only on trading. That said, I'm wondering whether the available quantity of each player will be part of the pricing formula, in which case the draft does indirectly affect pricing. They're being very close-mouthed about the whole trading mechanism.

2. No extras...just those left over from the drafts. But if you figure out the total amount of money available, about 1/2 of the useful players are going to go undrafted...there just isn't enough money for all the best players to get picked. It won't be evenly distributed though...some guys will be drafted in pretty every league and others will mostly be undrafted. If they didn't come up with a good mechanism this could be bad. For example, let's say Delmon Young at $2 gets drafted in every single league. So there's no way that more people can buy him than sell him. Does that mean his price can't rise from $2? I sure hope not.

Steven said...

Thanks. That's what I was afraid of. Obviously, still ok to keep Young (for example) and get a good value out of him, but I was hoping that the values would shoot up more than they probably will.

mymrbig said...

Here's to hoping they increase player prices slowly anytime a single player is 100% owned. This makes sense because if a player is 100% owned, then it means he is in a lot of demand. A manager could therefore be persuaded to sell for a higher price.

A steadily increasing price (up until managers start to sell the player) would give managers the incentive to sell a player.