Thursday, August 3, 2017

Fantasy Football Draft or Auction?

Tristan H. Cockcroft at ESPN has seen the beauty in auctions.With football season just around the corner, many a fan is looking to put together the ultimate fantasy football roster. And the first step is drafting players among your league members. What is wrong with a draft?
I'm tired of the annual charade of one of my longest-standing home leagues, in which the owner who draws the dreaded 10-spot -- it's a 10-team league -- reacts as if it's some sort of death sentence.

He proposes an English auction perhaps, as our favorite textbook shows, because it is essentially equivalent to a second price auction in which the bidding strategy is simple. Simplicity is important when you are bidding on multiple players and not just buying a single item. Still, he provides lots of advice on strategy: don't fall in love with players, avoid bidding wars, don't bid for players you won't use, don't get rattled, etc.

2 comments:

  1. The proposal to switch from a draft for fantasy football teams to more of an auction style bid process as proposed introduces an interesting concept. The proposal allows for “a second-price auction which induces bidders to bid more aggressively because their bid determines only whether they win, not the price they pay. The optimal strategy in a second-price auction is to bid exactly your value. This is because second-price auction is strategically equivalent to the English auction (Froeb, et al., 2016, pg. 234).” By having a system in place where those bidding on players are willing to pay the true value rather than just by the luck of the draw in a draft situation, the fantasy football would be in a position where fans are able to put together a roster of players based on calculated possible outcomes. As noted above in the fantasy football world, you are bidding on not just a single item but multiple players and how those players will do together. Similar to world of business, someone that is creating a fantasy football team is able to “gather information about the benefits and costs of a decision is to run experiments (Froeb, et al., 2016, pg. 223),” thus reducing the uncertainty in the decision making process.
    Froeb, L.M., McCann, B.T., Shor, M. and Ward, M.R. (2016). Managerial economics: A problem solving approach, 4th ed. Cengage Learning

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  2. Fantasy Football is a very popular “game” in my household. My boyfriend, dad, uncle, and four brothers and I are all in a league this year. When reading over the various submissions relating to auctions this one caught my attention. When reviewing the concepts in the textbook I would have never thought to relate the economic concept of auctions to the fantasy football draft. However, after reading the submission it allowed me to do so. Michael Ward brings up a good point in his submission when he relates it to a second price auction. Second price auction is a sealed-bid auction in which the item is awarded to the highest bidder, but the winner pays the second-highest bid. Froeb, McCann, Shor and Ward bring up a good point they say this type of auction allows the auctioneer to simulate what would have happened in an English auction, but without the need to have bidders show up at the same place and time (Froeb, McCann, Shor, Ward, 2016, pg. 234). This concept stands true, as the fantasy football draft can happen online, allowing bidders to not all be present at the same place and time. My experience through the draft was it was all done remotely allowing the highest bidder to place his or her bid when it was your turn. Another concept address in the text Managerial Economics that I can relate to this submission is common-value auction. This type of auction is where the value is the same for each bidder, but no one knows what it is. Each bidder has only an estimate of the unknown value (Froeb, McCann, Shor, Ward, 2016, pg. 236). This stands true for the Fantasy football draft. The value is the same for each bidder, and we each know an estimate of the unknown value. Each bidder goes into the draft knowing the projections of each player. It is an estimate because it can change depending on how well the player plays each game. However, each bidder goes into the draft all seeing the same estimated projection of each player. These projections in place are used for each bidder to decide on the pick they will choose in the draft/auction. Overall, after reading this submission it gave me a new way of thinking about each concept addressed in the text.

    Reference:
    Froeb, L. M., McCann, B. T., Shor, M., Ward, M. R. Managerial Economics a Problem Solving
    Approach. Fourth Edition. Boston, MA: Cengage Learning, 2016.

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