On Monday, I began a discussion about using your FAAB budget in the early weeks of the season.  To summarize, I advocated being very aggressive in spending FAAB dollars early.  After all, the earlier you purchase a player, the longer he’ll be on your roster accruing stats.  I discussed this in very general strokes, though, and wanted to go into a bit more depth today.

When deciding exactly how aggressive you should be in placing your FAAB bid, there are a number of factors that you should consider.

Zero-Dollar Bids
Does your league allow zero-dollar bids?  This might not seem like that big of a deal, but if your league allows them, you can be much more aggressive on good players since you don’t have to allocate a bunch of singles for the back end of your roster.  Over the course of a typical season, I usually wind up spending at least $10 on dollar players (in leagues that don’t allow zero bids).  Ten percent of your budget is nothing to sneeze at—after all, throwing an extra $10 on the vast majority of bids you make this year would be the difference between winning the player and losing him.  If you can avoid paying a dollar every time you need to pick up a reliever or a spot starter or a part-time injury replacement, it’s going to give you more flexibility to bid big on the impact players.

Trading FAAB Dollars
This follows similar logic to the zero-dollar bids.  If your league allows the trading of FAAB dollars, you can be a bit more aggressive in your bidding since, even if you run out of cash, there’s always the chance you can trade for more.  Don’t go crazy, of course, since there’s no guarantee you’ll be able to make such a trade, but just having that option open should make a difference in your approach.

Some leagues, such as Tout Wars, use a FAAB system called Vickrey where the winning bidder is only required to pay one dollar more than the second-highest bid.  Vickrey strategy is complicated and could be an article unto itself, but in general, in a league like this, you can afford to make a higher bid than usual since you won’t necessarily be held to such a bid.  Don’t place a bid you wouldn’t be willing to pay if push comes to shove, but you definitely have some leeway here.

Roster Spots
The number of roster spots your league uses is very important.  The fewer spots that get used, the more important premium talent is, since replacement level is higher.  In a league that uses three outfielders instead of five, naturally, those three outfielders need to be pretty good.  So if premium talent happens to become available, bigger spending is advisable.

Individual Circumstances and Player Liquidity
Obviously, your team’s needs are going to be important.  If you have five closers, you don’t need to overextend yourself for Hector Santiago.  That is, of course, unless your league has a very active trade market.  If this is the case and player value is very liquid (i.e. you can trade players easily to fill a more pressing need), then feel free to bid on the best players regardless of team need, since you can always trade to fill that need later.

League Type
Perhaps the biggest factor in deciding how aggressive to be is whether you’re playing in a mixed league or an AL/NL-only league.  In a mixed league, I advocate extreme, extreme aggression.  Basically, if you’re not spending your money early in a mixed league, what are you waiting for?  There are only going to be a handful of impact players to come off the waiver wire in a mixed league.  In a mixed league, everyone is in the player pool right from the get-go.  If someone is traded from the AL to the NL, it doesn’t matter in a mixed league since that player is already owned.  Additionally, while a prospect like the soon-to-be-recalled Joe Weiland might be a very appealing option to NL-only owners, mixed leaguers couldn’t care less.  Yes, there might be a couple impact prospects who get recalled over the course of a season, but you’ll be able to count on one hand the ones who can really help a mixed-league team. 

So who are you waiting on?  Aside from the rare impact prospect, newly anointed closers are about the only legitimate answer.  We know there will be a few of these each year, each with a similar level of risk, so when someone like Hector Santiago comes along, bid BIG.  Unless you play in a league of dummies where there’s a chance that Matt Cain gets dropped at some point, there’s no point in hoarding your FAAB cash.  When someone potentially useful comes along, you should be all over it; you might never get a better opportunity.

In an AL- or NL-only league, a bit more caution is advised (but don’t be too timid).  In a league like this, there will be plenty of usable parts that become available throughout the year, usually prospects or bench players who now find themselves in starting roles.  Even mediocre prospects can have a lot of value.  AL- and NL-only leagues are very much games of bulk.  The team that accrues the most at-bats and the most innings is almost always going to be a legitimate championship contender.  In a league like this, it makes more sense to spread the wealth a little bit, and it makes sense since there will be far more players deserving of double-digit bids than there will be in mixed leagues.  Still bid big on a guy like Santiago, but while you could justify bidding 60 or 70 percent in mixed leagues, maybe go 40 percent in AL-only.

Tendencies of Your Leaguemates
Finally, you need to take into consideration the tendencies of your leaguemates.  Maybe a 70-percent bid on Santiago in a mixed league makes sense in theory, but if your leaguemates hold notoriously tight purses, then you don’t need to go that high to secure his services.  Obviously, this needs to be considered on a case-by-case basis, and only you know your leaguemates, so bid accordingly.

In the DraftDay AL-only league, I submitted a bid of exactly 40 percent for Santiago last weekend but was just the third-highest bidder behind offers of 54 and 60 percent.  I think both are a bit too high, so I’m okay losing on Santiago.  Last year Mark Trumbo was the first big buy of the year in this league and he was won for an identical bid, so I was hoping my bid would hold up.  It didn’t, but all I can do is make what I believe to be the proper move. If my opponent outbids me (a theoretical mistake), I’m still going to benefit, if indirectly.

Thank you for reading

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You might want to correct the spelling of "Vickrey."
You are correct. Thanks for the heads up. I see it spelled Vickery in a lot of the Tout emails and guess I assumed that's how to do it.
I thought everyone used Vickrey. It's pretty standard for auctions where people aren't privy to others' bids.
You may be right. I was under the impression that Vickrey is not the standard, but I don't have any numbers to back it up.
Strategy in a Vickrey (or second-price) auction is as simple as it gets. Figure out the dollar value at which you would be indifferent to acquiring the player. Bid $1 less. Either you win, in which case you do no worse than break even, or you lose, in which case you couldn't have won without paying more than he's worth.

This is a lot simpler than a standard (first-price) auction, because you don't need to even think about what other players will bid. It is completely irrelevant.