Inflation - what exactly is it

[viper]

Inflation is a term bandied around and I’m not sure I have the best definition. Here is what I think it is and you can correct me.

First, I am referring to how it applies to auction leagues, assuming it can be applied to non-auction leagues.

I view it as the dollar amount a player goes for, in a specific league with specific owners, in excess of what my personal projected dollar amounts suggest. If I value Evan Longoria at $26 and he goes for $29, I perceive a $3 inflation. Of course, if the person who drafted him had him valued at $28, then he only sees $1 inflation.

If I look at prior years results and compare it to my expectations, I should be able to determine how my league over and under evaluates certain players.

This should be extended beyond individual player but also to positions. Are middle infielder over or under valued? What about closers and starting pitchers?

It should also include specialized skill like speed and HR power.

If I look at prior years results and compare it to my expectations, I should be able to determine how my league over and under evaluates certain players, positions and skills.

I also suspect that you should only look so far into the auction or at players over a certain dollar threshold in order to eliminate the bidding wars on less expensive players which can be held between owners who hoarded money for a late middle and end games.

Tell me where I am off base.

[Todd Zola]

Right neighborhood but maybe the wrong address?

The concept is correct.

All of the available players have a market values based just on their stats. Think of this as how much they would go for in a one-year league.

Add up all the values and that is how much the market values these players in total.

But in keeper leagues, the actual money available summed up from everyone EXCEEDS the above and we all know it is a cardinal sin to leave money on the table, so we are willing to pay an INFLATED price to roster some of the players, usually the better ones.

But here is where I veer off from your premise.

Every year, the dynamics of a keeper league is different. Different owners have the better keepers, different owners have lousy keepers. This influences the strategy. One year, an owner with a crappy list might decide to buy 4 players at hugely inflated prices do they can trade them, but the next year, he may have a great list and no one else uses the same strategy.

Maybe one year it happens the guys with money like scarce positions, so they pat inflated prices for 2B and SS, but another year, they already have a decent keeper at 2B or SS so they do not need to pay so much.

You can make the same argument with categories.

Maybe one year, there are a whole bunch of good 3B being kept, so the available ones go for a higher price, but the next year, a bunch of the ones kept the previous season have expiring contracts to they are back in the pool and there is no longer a need to overpay for a good one.

Basically, there are too many variable that contribute to the prices in any one year for me to draw any conclusions. Instead, I try to figure out what is going to happen THIS year.

There are clues -- look which owners have money and which don't. Look at the needed positions by the owners with money and don't get in a bidding war because you'll lose --focus on positions they already have filled, stuff like that.

[alleyoops]

Interesting, each of you appears to be saying that inflation is related to league tendencies. I've always viewed it as a mathematical formula, based on the fact that kept players *should* have keeper salaries that are less than their "value" - the $ they would go for in a non-keeper league (this is subjective and variable, of course). For example, if I keep Kimbrel at $6 in a NL-only league, and he should be "worth" $26, that is $20 more that I can spend on my other 22 guys at auction time. If you add up this "bargain amount" for all kept players, you get a total amount of "extra $" that can be spent at the auction. I see inflation % as (roughly, would have to check the math) that total bargain amount divided by the total $ to be spent in the auction. If inflation was linear (not saying that it is), you would have to pay that % more for each player, just due to the increased availability of cash to buy players over the non-keeper amounts.

So in my mind inflation is different from league bias. Both are important to factor into your strategy, but they're two different concepts.

[Todd Zola]

Al - that is the conventional mathematical that is considered the correct treatment of inflation and had been beaten into the fantasy playing public, but to me it is not practical as the top guys always go for more than the linearly adjusted mathematical value.

We are including inflation in our draft software mainly because I was able to come up with a mathematical treatment that adds money to the top and takes it from the bottom as opposed to using the conventional standard linear method because the "math is correct."

Truth be told, there is no algorithm that can correctly get into owner's heads and predict what they will do when they have a wad of cash and are given the keys to the candy store.

[viper]

I deal exclusively with redraft leagues, Does inflation have meaning in these league? Or am I in another county but in the same state.

[Todd Zola]

Inflation does occur in redraft leagues (obviously) and because most of the variables are not present without keepers, you can pick up on some more general trends, but I still wouldn't want to base a strategy around it. And what you pick up on may not even be inflation related, but just general tendencies, though "I know John always pays for catchers" is part inflation, part general.

In redraft leagues, the best strategy is to avoid the guys going for inflated prices but in keeper leagues, you have to buy them.

[josh]

In the draft software, the software says I believe, set it at 69%. How could I calculate where my league falls in? BTW, Im not using the software at the draft, just to get an idea of what I should be spending, does that matter?

[Todd Zola]

That 69% is not inflation, but the normal hitting to pitching split that presently occurs in most 5x5 auctions.

In terms of budget allocations, it means most leagues average $180 per team spent on hitting and $80 on pitching.

[alleyoops]

Al - that is the conventional mathematical that is considered the correct treatment of inflation and had been beaten into the fantasy playing public, but to me it is not practical as the top guys always go for more than the linearly adjusted mathematical value.

We are including inflation in our draft software mainly because I was able to come up with a mathematical treatment that adds money to the top and takes it from the bottom as opposed to using the conventional standard linear method because the "math is correct."

Truth be told, there is no algorithm that can correctly get into owner's heads and predict what they will do when they have a wad of cash and are given the keys to the candy store.

Yep, I agree that in practice, it is not linear. The "extra $" is spent more on the top tier guys, usually. So a guy who should go for $40, goes for $50, but a guy who should go for $5 still goes for $5. It will be great if the software can approximate this. Rotolab has a "stars and scrubs vs spread the risk" slider that kind of does the same thing, allowing you to tailor the "steepness" to your own league. Would be nice if you could build in a variable setting or something like that, as opposed to hard-coding a formula. But any non-linear adjustment (assuming it gets higher with higher-priced guys) is better than linear. Looking forward to getting more familiar with all of the tools that are available here this season.

[Kelly_Leak]

In my AL-only keeper league, I calculate inflation by category as opposed to a total or hitting/pitching inflation (I think the MB tools may do something similar).

For instance, if there are a bunch of closers kept one year (all below projected value), then the projected value for the remaining closers will reflect that only a fraction of the total save dollars are left.

There have been times where a player like Ellsbury is ranked higher on my tiers than a Pujols after inflation. I've found that recognizing these type of things before others can be a big advantage on draft day (particularly in my league).

Sorry, this got a bit sidetracked Viper, as I know you were asking about redraft leagues. I could see this coming into play though in redrafts if a couple closers, for example, went for below their projected dollar amount. You could then expect there to be some kind of market correction (unless your league undervalues closers).

[Todd Zola]

I agree categorical inflation is important, but our algorithm is not nearly that involved.

Basically, what I do is recalculate the values after each player is purchased, based on the money left in the pool and the number of empty roster spots. This continually forces the lowest ranked players at each position to be $1, which is what would happen in a real auction, while redistributing the rest of the money relative to the quality of the remaining players.

Hmm, I think I have a topic for next week's strategy essay.