Earlier this week I talked about draft deflation… The basic idea was that fantasy players are going to pay less than what is projected for the lower-tier players. I mentioned two reasons for this phenomenon: variances in projections and focusing on sleepers.
Now, if owners are consistently spending less than what is projected for the $15 and under crowd, then that extra money must go somewhere. Not surprisingly, the money saved through deflation will typically show up as inflation for the top-tier of players.
I’ve chosen to focus on deflation in one area causing inflation in another, but I’m sure you could make the opposite argument as well: If top-tier players are equally valued by most fantasy owners, their prices will tend to be inflated. And if everyone overspends on those players, then the prices of lower-tier players are deflated because everyone runs out of money.
Either way you choose to look at it, I think it’s a real trend for teams to pay more than expected for stars and to pay less than expected for scrubs.
The thing to remember, though, is that top-tier players are concentrated in the early rounds of the draft. If you are in a situation where you expect the prices in later rounds to drop below your projections, it might be wise to anticipate that by spending extra early. You pay the inflated prices when you have to, anticipating deflated prices later.
This common auction order (best players first) is probably also a factor in inflation/deflation. Early on, teams have lots of money and plenty of open positions. More teams will be involved in the bidding, and it is more likely that the market will bid efficiently.
Later, teams may not bid if they are worried about budgeting, or if they already have filled a certain position. Since it is typically the lesser players brought out at this stage of the auction, it is more likely that their prices will be deflated.
In practice, overspending early can be a difficult thing to make ourselves do. It’s easier to overspend in situations where we have already seen the deflation, as with keepers. With keepers, we know we have saved money on certain players, so we know we can spend extra on others.
But with this natural inflation, we don’t actually see the deflation until the end of the draft, and it’s much harder to overspend early. Knowing that teams struggle to do this should be an advantage to those who overcome the psychological barriers, though.
So I hope you don’t feel bad after going the extra buck or ($5) on Hanley Ramirez this week.
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