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June 13, 2014 6:00 am
Sunk costs impact everyone's fantasy decisions, but acting on them the right way can give you an advantage.
Earlier in the calendar year, I wrote about strategic agility on auction and draft day. Today, we discuss in-season strategic agility, which is really more about decision framing and sunk costs than actual strategy. We are at the point of the season where we should be deciding or at least analyzing if we should be buyers, sellers, or standing pat. There are serious obstacles to overcome when doing this critical (for fantasy baseball purposes) analysis, those obstacles being our past decisions. As many others and I have mentioned before, our desire to be right (not wrong) is often greater than our desire to optimize profit, utility, fantasy baseball glory, etc. When our past strategic decisions turn out to be wrong, we may very well find ourselves trying to make up for our mistakes instead of making the best decision based on where we currently stand. To overcome these obstacles we will take a look at how we come to face them, what causes us to fall victim to them, how we can overcome them, and how we can leverage sunk costs against our leaguemates.
Please allow me to start with an example and go from there. Example:
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January 30, 2013 5:00 am
Which contracts might their teams be better off eating this season?
In some ways, the team-specific strengths and weaknesses that metrics like wins above replacement player (or wins above replacement, in more ink-frugal corners of the internet) don’t attempt to account for is what drives much of baseball’s commerce. Every team’s actual replacement player, as opposed to the generic hypothetical, varies. Yes, the Justin Upton trade was about each team’s view of talent and probably grit, but even though the Diamondbacks don’t value Upton like the market may, the situation would have been totally different had Arizona’s roster included only two competent outfielders rather than five.
As much as the identity of each team’s easily available replacement player comes into play in the penthouse of the market, we will see throughout the year that it matters where the worst contracts are concerned, as well. Sunk costs take up space on rosters and even more space on payrolls when there is no suitable replacement. But when there is, we sometimes see action.
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