Sunday, April 5, 2009

On Balancing Ranges in an Auction-like Nerd Setting

Clearly, two of my favorite things, poker and baseball, have shockingly little in common. However, poker has informed much of my fantasy baseball gambling, including what I consider to be an epic draft from yesterday. We went back-to-back with our live draft, which I will outline a bit tomorrow (because I'm insanely hung over) - the concept is deviously simple: six men, drafting every team in baseball auction-style (arbitrary $20 action value; increments of $0.25), with each win for your teams worth $0.50 from each of the other five players, plus $7.50 paid to each of the division leaders after the first 2 months, second 2 months, and end-of-season. Depending on how you draft, costs can spiral somewhat rapidly - something like 35% of the trials result in at least one player losing $100. It's not "large potatoes" by any stretch of Dan Quayle's imagination - I'm simply pointing out that the fiddy-cent increment is kind of a red herring.

I used Baseball Prospectus's projected standings (PECOTA-enhanced); in terms of recent performance, they are by far the most predictive, although I did sprinkle with a hearty dose of common sense. Because I'm a massive, massive nerd, I needed a way to properly set valuation of teams in such an environment - I knew from last year that the 'best' teams would go for something in the range of $8 to $9, but also knew that $9 was the max anyone would pay. In order to jigger some valuation out of the deal, I figured that the worst team (Pittsburgh) would be 'worth' $1 and the best team (Yankees, at 99 wins - I know, fucking kill me) would be 'worth' $9. I then set up a spreadsheet to set the 'baseline' values and determine what each team should be worth between those two extremes. It turns out, since all teams need to be picked, an 81-81 team (such as, oh, the Angels) is worth about $4.40 or so - not surprising, but indicative of the odd valuation that a limited money environment forces.

I knew that I would have to overpay for a top team - my goal going in was to maximize EV, even at the expense of my best-case scenario (note: this is exactly the opposite of how I filled out my NCAA brackets; fuck my life). I figured if I could get one guaranteed 90+ win team, one other potential division winner, and two .500-level teams, my guaranteed 'shitter' 5th team would be successfully offset, and I'd be freerolling the division championship or wildcard scenarios. I was willing to pay out the ass for one great team, look for value in underrated teams in shitty divisions, and wouldn't worry too much about my last team unless I could get lucky (foreshadowing: I did not get lucky) - plus, I wanted to nominate secretly-shitty teams like the Angels, Astros and Marlins to bleed out dollars so I could dominate the late rounds.

The first team nominated was, of course, the New York Yankees, the probable best team in baseball (again, fuck me). I started the bidding at $5, effectively announcing that I wanted to be the proud new owner of the worst team since the SS. This was by far the weakness in my "system" since I set an arbitrary price for the team - however, I got the Yankees at $8.50, an amount that should be profitable unless I do something catastrophic the rest of the way. Luckily, I did not Thurmon Munson the rest of the draft.

The Angels were, predictably, massively overrated - although their division is TURRRR-BULL like Chuck Barkley's blowjob story, they're simply not a great value compared to the Yankees, even though they went for exactly the same price ($8.50). We were drafting with Cubs fans, so even though I love the Cubs in this kind of scenario, I wasn't willing to pay the $9 it would take (note: I also couldn't).

I did acquire the 'mediocre' fillers at reasonable prices - I got the Brewers and the Cardinals for $3.50 and $2.75, which are massively undervalued resources, and even give me a little bit of division-winner upside. I was able to leverage the low amount of remaining dollars into the A's at $4 too, giving me the second probable division winner to fill out my plan. I got stuck in a late-game bidding scenario where everyone could outbid me, so I wound up with the second-to-last of the shitty teams, with the Padres - make no mistake, the Pads are terrible, but hopefully the craptacular NL West can at least propel everyone to equivalent mediocrity. Still though, it looks like I should be +EV on the whole, with some upside to win serious money. Nobody's other picks really inspire any fear - I'll post each of the teams as soon as I get the spreadsheet. Good times.

Wait until tomorrow, when I'll compare the great success of this auction with the total misguided nightmare of the actual fantasy draft . . . note to self: draft a pitcher someday. God.

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