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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.

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uncasf1
4/05
Good article. I play in a keeper auction league where we keep up to half our roster each year. I decided long ago that having a draft plan or set player targets was a waste of time. That plan and those targets were only valid until the first player hit the bidding block. Once bidding starts it is all about the real time market forces of the draft and accurately assessing those forces as soon as possible. And the key as you point out, is to figure out where the bargains will likely result (or in a nod to Michael Lewis, find the undervalued commodity). Too many team owners bidding practices are driven by the idea of need; I need a 3B so I must pay the going rate to get a good one. I see that all the time in my league and such a rigid approach results in too many at value or overvalued players and few relative bargains that you can carry over to the following year.
craneplace
4/06
Yup definitely. I think there is an idea regarding need that it needs to be filled during the auction. In keeper leagues particularly, where trade markets tend to be active, our immediately post-auction teams do not need to be perfectly ideal. The more trade value we can acquire (often with good keeper prices) the better we can form our team in season.
NeauxBrainers
4/05
Jeff, this is the same in my keeper league, where five teams spent more than $100 last year on pitching, all of them finishing the year in the bottom half, with a team that spent $67. The key, I think, is to buy a stud and to fill in in with average starters who have lower salaries such as your Miley. Not an easy auction, particularly when the best pitchers you see near the end are middle relievers, and there go your wins and strikeouts.
craneplace
4/06
Yes. But even this can be difficult because every team often wants a top pitcher and then the best pitcher on the board keeps being incredibly expensive. This is why I think we have to be "in" on every player in an auction because we never know which player is going to be a bargain or at-price relative to similar players.
TroJim
4/05
Jeff, I really enjoy The Quinton. Speaking from my more limited experience in keeper leagues, there are two goals which I try to balance on draft day. The first is just as you have described....to identify where the market is going and to take advantage of its inefficiencies. The second is to make sure that I spend my money. And that can be a challenge when the types of players that are being overvalued are all of the "good" players. In order to spend your money, I think you need to have a plan. If your plan is to be patient and not overspend on top players, then you need to keep an eye on the remaining player pool and the budgets of your competitors. It only takes one or two other players with your same approach to engage you into bidding wars over the intermediate players. This is something to be aware of and avoided. A somewhat easier plan to execute (though perhaps less efficient) is to overspend with the market on one or two top players. That takes some of the pressure off if the bargains don't come until much later in the draft. Knowing my home league, I have tended to overspend early so that I can at least be selective about which players I am overspending on. I have debated about how much I should just build in a "good player premium" into my auction values, but I have decided against this for the reason that doing so would push me towards overspending with the market and reduce my ability to discern true values. I believe that the situation that you described above, where the overspending is in pitching, is a situation where spending your money is less of a concern. If the market drives you toward finding bargains in the middle tiers of hitting, it is easier to spend $260 than if the bargains are in middle-tier pitching. Regardless, you need to pay attention to what is happening and react accordingly. Thank you for your efforts.
craneplace
4/06
Thanks TroJim! I completely agree with your assessment. You kind of hit on the overall theme of the article--that if everyone else wants to overspend for a certain type of player or team construction, then we can take advantage by taking the discounts caused by that strategy (but you are right, it does take a lot of prep and effort).
ndparks
4/06
The major problem in predicting auction values is applying inflation. If you calculate inflation to be 20%, the tendency will be to apply that 20% equally across all players. The reality is that the "skew" of the inflation will really vary, particularly if your league allows unlimited drops, where you can remove players who are poor performers. This allows people to pay up for the stars and worry less about lower valued players that can be easily replaced with free agency. The biggest difficulty about getting projections correct is estimating playing time - so free drop leagues can worry less about safety than leagues that have liberal free agency and trading. In a 20% general inflationary environment, individual players could see their inflation run 35% or more. So I suppose the lesson here is that the rules governing player movement likely have a really large impact on individual player valuation.
Robotey
4/06
Jeff - I love reading about Keeper league inflation and this is good stuff; now I'm an NL only guy, but I do follow AL somewhat. Isn't a keeper staff starting with Keuchel, Stroman, Wade Davis and Andrew Miller considered strong? You've got a CY Young, upcoming #1 (the Jays think so) plus 2 awesome relievers. What am I missing? Are you saying that this afforded you the chance to not overspend on what pitching was available?
craneplace
4/06
Robotey- it is a 10 team AL only, so not the deepest. While I'd Kuechel is a true "1", Stroman is probably a 2 with decent uncertainty, but I think most would want to add a third SP better than Wade Miley--I think that's a pretty severe drop. And I was trying, but the market just kept pricing me out. I think in the past I would have likely overpaid to get that third SP.
Robotey
4/06
Thanks for the response - I feel your pain on this one. I find in my ten team, what often happens is I'll keep 2 good arms--as you did--and then my heart wants me to go grab an ace, but they all go for so much more than I think they should that I drop out once they approach $30 that I end up filling out my staff with good value in the $10-$15 range. The result isnt sexy, but if I use the $ on hitting, then it can be effective. Of course, last year I made a slight exception and go the surest thing around, grabbing Wainwright for what seemed like a good deal at $27--compared to the over $30 that other pitchers were going, seemed good--and then he promptly tore his Achilles. Luckily I had allocated some saved $ to depth in hitting and flipped some for Jon Lester, who was my pseudo-ace. I do find, though, it's tough not to take some chances in a keeper league. You will likely overpay for someone, and that's ok. There weren't many ss left in our league, so I targeted Tulo. Well, we know how that turned out.