On Saturday, I participated in my NL-only keeper-league auction. On Sunday, I participated in my AL-only keeper-league auction. Below are some takeaways from these auctions.

Spending with the Market
One way discounts come to be in an auction is when the market overvalues a particular player or type of player (for example, pitching), which then leaves owners without enough money to pay market price for players elsewhere (for example, hitting). It can be tempting to “spend with the market,” especially when we are being shut out of a position (for example, closers) or when we are weak in a particular area. My advice, especially in a keeper league, would be to pass on overpriced players, take the values elsewhere, and then trade those values (likely keepers) for whatever was going at a premium in the auction. Depending on your league’s trade activity (or lack of activity), this may or may not be possible, but I am still inclined to pass on certain areas and potentially dominate other areas rather than overspend. For one, this allows us to hold advantages elsewhere, but this also helps us on the waiver wire. Owners who overpay for certain players are likely to hold on to them too long and are also more likely to throw back usable players to fill in the gaps created by overspending.

So, we get it: As tempting as it is to spend (read: overspend) with the market to get a team that is similar to the one we imagined heading into the auction, we should take as many discounts or at-price players as possible, which often will mean straying from the market when it is incorrectly valuing a certain type of player. That said, the desire to act in accord with others, to embrace league norms, is a powerful influencer. Spending with the market, regardless if the market is spending optimally or not, is defensive decision making—it gives an excuse for our decision should our decisions not work out and that is a very appealing proposition to our risk averse minds. It is not very appealing, though, if we want the best odds of winning. Lastly, it is scary to stray from the herd for the first time, but if we can make ourselves do so, the benefits can be tremendous largely because no one else is doing so because of the obstacles just mentioned.

Theoretical vs. Real Inflation
When preparing for a keeper-league auction, we must calculate inflation in order to determine the correct price for players in the auction. Based on those calculations we determine when to stop bidding on any player. As mentioned in the previous topic, the auction participants and thus the market often act sub-optimally. In my AL-only last year, where the only non-mid-tier starting pitchers available were Felix Hernandez and David Price (with the next best pitchers arguably being Jose Quintana and Anibal Sanchez), we saw pitchers—both the high-end and mid-tier options—go at either extremely high or pretty-high prices. I thought this was a one year quirk because of the circumstances; thus, when I went back to do my inflation calculation and auction valuations, I assumed that pitching inflation would return to normal levels this year. This assumption turned out to be wrong and hitters ended up being very reasonable and/or terrific values. The result of this was that I got (what I think are) good values on hitters, while getting largely shutout on pitching; after entering with Dallas Keuchel, Marcus Stroman, Wade Davis, and Andrew Miller, I ended up spending $19 total on Alex Colome, Wade Miley, Doug Fister, Shane Greene, and Kelvin Herrera. Not a great pitching staff, but my hitting is (on paper) very strong.

I think the knee-jerk reaction to this outcome would be to bump up pitcher prices next year and reduce hitter prices. I think this is a mistake because it appears there is more advantage to be gained by grabbing hitters at fair or discounted prices than there is lost by going cheap on pitching (it worked last season so there is some precedent). Instead, I think the correct response—if I could be certain that the league was going to overvalue pitchers—would be to keep fewer “at-price” hitters. In other words, in my theoretical calculation, I had Brett Lawrie as a keeper at $16, but given the actual prices, this proved to be a mistake as I could have gotten a more-productive hitter with that $16 in the auction or I likely could have purchased Lawrie at a cheaper price.

This is would be a dangerous game to play because you could end up forfeiting value from a keeper if the market corrects itself. That said, there is a lot of value to be gained by taking advantage of real inflation versus theoretical inflation, so we just need to weigh the pros and cons as best we can.