It is early in the 2015 baseball season. Any article about baseball at this time must at least try to mention this in good faith. We know the usual early-season fantasy baseball topics: small sample size, overreactions, regression, buying low, selling high, patience, it being cold outside, injuries, etc. We also know the usual, often good advice: Be patient, but not overly patient, check to see if skills have changed not just results, etc. Because trades happen infrequently in the beginning of the season, they are rarely discussed outside of the previously mentioned buy low, sell high framework. However, it probably behooves us to take a step back and view early season trades as they relate to strategy and human behavior in general. The interesting part of early season trades is that the influencing factors do not align; thus, we cannot responsibly advise that anyone seek or avoid early season trades without exception. Rather, it depends on the situation. We will now take a look at the reasons that make these trades potentially beneficial and those that make them potentially detrimental.
The Benefits:
For starters, decreased demand can lead to buyers’ markets. Demand in the trade market is often suppressed in the beginning of the season for the same reasons free agency/FAAB/waivers activity is suppressed in the beginning of the season, those reasons being the endowment effect and loss aversion. With fewer participants theoretically driving up acquisition cost, players could be available more cheaply than during periods of higher demand such as the trade deadline.
While these same phenomena can also lead to decreased supply, offsetting the impact of decreased demand, we need only one motivated seller to provide the supply required to take advantage of the decreased demand. While early season motivated sellers are not a dime a dozen, they do appear from time to time (I know they do because I was one of these fantasy baseball participants when I first started out). When we take the ol’ reliable disposition effect (that we tend to buy high and sell low) into account, we can see how early season trades can provide opportunities to trade with overzealous buyers or sellers.
Lastly, regardless of whether a trade gets made, early season trade talk can be helpful for future trades. By building dialogue and getting info on how your leaguemates perceive their needs, we might be able to make trades we might not have thought realistic at first glance.
The Detriments:
We hinted at it previously, “it” being that decreased supply can offset any advantages provided by decreased demand. If this is the case, if we are actively seeking the overzealous trade partner and no overzealous trade partner exists, then we may very well end up being the overzealous trader if we are no careful. The key here is to be opportunistic rather than to allow our actions be dictated by an overarching theory. If there is an overzealous trade partner, then go get ‘em; if not, be patient. I am sure you are all thrilled with the obvious advice that was pointed out above as being “usual”.
Now that we have all caught our breath, it should be pointed out that our overconfidence in our abilities to predict the future further supports being patient with trades early in the season at least when it comes to trading for need. Why? Because while we might think we know what our needs are at this point of the season, there is a higher chance than we think that we do not know. It is not that we should never trade for need, it is that we are too likely to misevaluate our needs and the likelihood of us doing so only increases the earlier in the season it is. For example, think of the accuracy of today’s weather forecast compared to the accuracy of tomorrow’s forecast compared to the accuracy of the Farmer’s Almanac’s to three months from now. Given their respective accuracy, we are much more likely to make beneficial strategic decisions from tomorrows forecast than from the Farmer’s Almanac. Moreover, as the season progresses larger needs or more easily/cheaply fixed needs are likely to arise (especially as other teams accumulate needs). Consequently, trading value for need early in the season can leave you without the resources to fill needs later in the season. Cool. To the takeaways.
Takeaways:
- Look for impatient trade partners: they probably do not exist in your league, but if one does, being the owner that takes advantage of their impatience is a huge boon. This takes a lot of work, often without payoff, but the reward is worth it.
- Be there for those in need: just as we do not want to be trading value for need early in the season, we want to be on the other side of that equation, getting value to help fill another owner’s need.
- “If you want to make God laugh, tell him about your plans.” –Woody Allen. As mentioned before, we think we know more about the future than we really do, so be a little more patient when filling needs or moving what appears to be excess depth.
Thank you for reading
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