Fantasy Freestyle: Hello Vickrey, My (Now) Old Friend

In the process of doing a good thing for our readers, I simultaneously did them a disservice, and also did something that I hate seeing when other writers/websites do it.

This spring, Bret Sayre and I decided to reintroduce Baseball Prospectus’ Expert FAAB Review. This column analyzes not only the players purchased in the LABR and Tout Wars expert leagues, but also analyzes the rationale behind why certain experts made the bids that they made. There are some sad little attempts at humor on my part as well that go over like the proverbial lead balloon.

Something I neglected to do when I started the series was explain Vickrey auctions, one of Tout Wars’ more complicated wrinkles. I assumed that since Tout Wars has been around for years and this bidding system has been around for at least as long as I have been in the league (2010) that everyone simply knew what Vickrey auctions are. This is the thing I hate: presenting something as common knowledge/established fact when it is in reality obscure or not proven. So I apologize profusely.

With that mea culpa out of the way, what is Vickrey?

There are a number of explanations you can find thanks to the magic of the Internet of how Vickrey auctions came to exist and why they are useful. The purpose of this article isn’t to dive into economic theory but rather to explain how Vickrey works in Tout Wars and the impact it has compared to LABR, a non-Vickrey expert league.

In most fantasy leagues that use a Free Agent Acquisition Budget (FAAB), “sealed” bids are submitted through the league’s stat service website and the highest bid obtains the player’s services. So if Mike Gianella and Bret Sayre of Baseball Prospectus’ bid $44 for Jason Grilli is the highest bid in LABR mixed, then Mike and Bret get Grilli for $44.

In leagues like Tout Wars that use Vickrey, the team with the highest bid pays the amount of the second highest bid, plus one dollar. So if Mike Gianella and Bret Sayre of Baseball Prospectus bid $44 on Grilli and the second highest bid is $35, Mike and Bret would be awarded Grilli for $36.

Eight dollars might sound like a negligible difference, but over time the impact of Vickrey adds up in Tout Wars.

Table 1: 15-Team Mixed FAAB Results 2015: LABR, Tout Auction, Tout Draft ($20 or higher)

*different transaction dates for LABR/Tout Wars in Week One

The “week” and player columns are self-explanatory. Each league shows the primary bid and the second highest bid. If there was no bid on the player listed, the column for that league is left blank. With the exceptions of the top three players on Table 1, I did not go back and include bids from prior weeks for any of the players on this chart.

One of the biggest challenges with an exercise of this nature is that the nature of mixed leagues means that you are comparing apples to non-fruit foodstuffs and sometimes even non-foodstuffs. Even in a 15-team mixed league, there is enough depth in the free agent pool that one expert’s trash is another expert’s treasure. Tout Wars also allows FAAB speculation on minor leaguers like Franco, whereas LABR does not; this skews the results of this informal study as well.

This doesn’t mean that there aren’t some conclusions to be drawn about the nature of bidding in Vickrey versus non-Vickrey leagues.

I’m surprised that the bidding in the early going was higher in LABR than it was in both Tout leagues on every $30+ free agent with the exception of Grilli. One of the purposes of Vickrey is to permit owners to bid the “true” value of a player without fear of overpaying if no one else in the league believes that the player is worth that much. Yet Grilli, Castro, Familia, Bradley, Russell, and Swihart all go for more—and in some cases significantly more—than they do in either Tout Wars league.

In theory, not having Vickrey in place is supposed to make owners hedge their bets so that they don’t overspend. In practice, LABR owners are treating their investments in April like there is no tomorrow, with the rationale that five or six months of a player is better than four months of a player. This is also true in Tout Wars, of course, so while this theory may partially answer this conundrum it does not explain it away entirely.

One thing that Vickrey does do is create an environment that allows for a more robust set of second-tier bids in Tout Wars that does not exist in LABR. Ben Paulsen is the only player in LABR who garners a FAAB bid between $20-29, while seven players receive bids in this range in LABR mixed draft with 11 players doing so in LABR mixed auction. Part of the reason that there are so many bids is that the Vickrey mechanism allows for more of these bids by its very nature. If you bid $21 on Paulsen in LABR, that is the price that you will pay. If you bid $22 on Jung-ho Kang in Tout mixed draft and the next highest bid is two dollars, you only have to pay three. The more that Vickrey reduces the bid prices on individual players, the higher the bid prices will be in subsequent weeks on subsequent players.

I am surprised that there aren’t more aggressive, $20-plus bids on either Tout Wars format. Once again, though, this ties back to the nature of “standard” mixed leagues. Replacements can potentially come through every week, and blowing through one-fifth or more of your budget on a player who is no better or no worse than most of the free agent pool is counterintuitive. Aggressive bidding behavior makes more sense in AL-only or NL-only, where quality replacements are harder to come by.

Table 2: NL Only FAAB Results 2015: LABR and Tout Wars ($20 or higher)

The late historian Howard Zinn once wrote a book called Passionate Declarations. The book is a terrific read about social justice through the prism of contemporary American history, but I like to imagine that it is just 368 pages of Mr. Zinn simply making passionate declarations about the most quotidian subject matters ever. “I like peanut butter and jelly sandwiches. But nothing ruins a good peanut butter and jelly sandwich more than when you put too much OR too little jelly on it! This is important and I must write another 5,000 words on this subject!”

Mono league FAAB bids in Vickrey are the experts’ passionate declarations about the players who they like. Ha, see what I did there? Yes, I know; it was a really long walk around the block for a pretty weak joke about a very obscure book. But that’s what I do. I am a ruiner.

In LABR, putting down $41 on Plawecki is a potentially crippling move from a tactical perspective. In Tout Wars, while $32 is a lot of spend on Plawecki, Vickrey allows for plenty of additional opportunities to spend generously on free agents later during the season. And while Cahill looks like a terrible investment now with the benefit of June’s balmy hindsight, in the coolness of early April the potential of 160-170 innings from a starting pitcher under Roger McDowell’s expert tutelage could have worked out rather nicely.

The cupboard has been extremely bare in the National League this year. Should the experts have pushed the envelope even more on these players, or on the players who cost less than $20 who aren’t sitting for this portrait? Possibly. One of the challenges in a league like Tout Wars is that the best potential additions are often sitting on someone’s reserve list. Maikel Franco, Addison Russell, and Noah Syndergaard were all stashed on reserve lists prior to their call ups. Since Tout also allows teams to bid preemptively on minor leaguers, players like Stephen Piscotty and Matt Wisler get nabbed at cheap prices weeks before their potential call ups. Teams probably should be bidding more on players like Paulsen, but the Catch-22 is that the best free agents in leagues like Tout Wars simply aren’t very good.

Table 3: AL Only FAAB Results 2015: LABR and Tout Wars ($20 or higher)

*week 7 bidding

If the AL Tout Wars experts are slightly more aggressive than the NL Tout Wars experts, the AL LABR experts are far more aggressive than the NL Tout Wars experts. McCullers and Rodriguez were certainly far more worthy in the AL of high bids than Buchanan and Cahill were in the NL, but it isn’t just the quality of players available in the AL expert leagues but rather the idea that the AL owners recognize that there is no tomorrow. Twenty-two FAAB dollars for Jose Pirela seems silly as I write this, but a few weeks ago there was the distinct possibility that he could run with a middle infield job for the Yankees.

Vickrey works well at promoting aggressive bids on players who nobody really wants like Pirela, Peguero, and Villar but Tout Wars is actually conservative compared to LABR AL when comes to players like McCullers and Rodriguez. The AL LABR owners who are bidding aggressively on Rodriguez and McCullers aren’t worried about the players who are going to come down the transom later but instead are simply bidding aggressively for the pitchers who they want to buy. Vickrey should be pushing the Tout Wars owners into higher bids on players like Rodriguez but it simply isn’t. What Vickrey is doing is allowing for more aggressive bids on players like Paredes and Villar who shouldn’t be going for $35 or more and are not as a result of Vickrey.

Vickrey bidding in Tout Wars has often been described as an attempt to force more aggressive bidding on the whole by tamping down prices on a case-by-case basis. However, the price on the top players between LABR and Tout is changing very little if at all between the Vickrey and non-Vickrey expert leagues. As the season progresses, it is certain that the nature of Vickrey will create a structure of higher bids in Tout Wars, but Vickrey doesn’t work the way it is advertised in Tout Wars, particularly not in the early parts of the season in expert leagues.