July 22, 2015

The Quinton

Barren Trade Markets, Creativity, and Siren Songs

by Jeff Quinton

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The trade deadline is fast approaching in many a fantasy baseball league. Multiple articles about trade markets, trade talk, and negotiation have been written by yours truly. Other articles about the topics have been written by others.

However, no matter how many articles we write or read, sometimes there are not any good, obvious trades out there. Sometimes, there are not any good, not-obvious trades out there. In this situation, what should we do? Try to figure out an even more creative solution or hold tight? Maybe we should go back and re-check because we might have missed something?

We ultimately want to frame all our decisions by asking, “Does this move or non-move improve my chances of winning more than any other move or non-move?” The issue, however, is that when we contemplate each of the above solutions (standing pat and looking for a creative solution), each makes certain decision-making follies more likely. Yes, one of the solutions will be the optimal solution at any given time, but we need to make sure that we are choosing that solution based on factors that matter if we want to give ourselves the best chances of winning. We will therefore take a look at how each of these solutions tempts us for reasons that do not align with our goal of winning and what we can to avoid those temptations.

Standing Pat and Defensive Decision-Making

We have been here before, we know that road, we know exactly where it ends. That said, this is a different situation and is therefore worth mentioning. When there are no obvious trades, our loss-averse minds (we avoid loss more than we seek gains) find even greater comfort in avoiding making a seemingly risky decision. Additionally, making a trade, especially one that may go against precedent or league norms, is a decision that is more traceable than standing pat. Even if we do not decide to pack it in for the season, it is often tempting to defer the decision until later. While deferring the decision might be the correct choice, we need to make sure we are fully weighing all of our options before doing so. In other words, we need to (i) make sure we are not deferring our decision as a way of avoiding risk for the sake of avoiding risk and (ii) fully vet all of the not-obvious options before deciding whether standing pat is the best solution. Fully vetting all of the not-obvious options comes with its own risks, which we will take a look at below.

Creative Solutions and Cognitive Biases

First up is our old friend confirmation bias. In situations where we feel as if we need to make a move in order to win, we are more likely to search for information that tells that making a certain move is going to improve our odds of winning. An example from a situation I am facing (and the inspiration for this article):

In an NL-only keeper league, I had been in first place from early May until last week. A team that had been in second or third place most of the season team made a great trade on June 22^nd in which they acquired Zack Greinke, Matt Kemp, and an expiring Adrian Gonzalez. That team is now in first place and it does not look like my team could regain first place as it is currently constructed. I have looked and looked, but having already spent trade chips to acquire Buster Posey, John Lackey, and an expiring Juan Uribe and looking at what the “sellers” have to sell, I have not been able to find a trade that makes sense for both sides.

The temptation for me in the above situation, and (I am guessing) for others in such a situation, is to take an even-deeper look and try to find not-obvious solutions. In theory, this is what we should be doing in this situation. The problem I am experiencing, though, is that I catch myself getting a little bit too involved in monthly splits, looking at players who are probably not good enough to move the needle, but have been playing well enough of late that I can trick myself into believing so. Put differently, confirmation bias is working to give me a solution that I want without considering whether the solution is real or not.

Additionally, we have to watch out for pseudocertainty effect when searching for creative solutions. We should do so because the pseudocertainty effect tells us that we are more likely to make risk-seeking choices when the expected outcomes are negative. In a case like the above, when we are more than likely to lose, taking a risk becomes more appealing because it appears to be our only chance at winning. While taking on risk might certainly be the best way to improve our odds in some situations, the pseudocertainty effect indicates that we are not weighing the odds at all. Consequently, we very well may be decreasing our odds of winning when taking on risk for the sake of doing something.

Solution

Given that I am currently contemplating this problem in one of my leagues, I am probably not the best person to ask for a solution (or write about a solution) because I will probably have difficulty obtaining an outsider’s view of the problem. With that caveat, my solution has been to try to avoid defensive decision-making by rigorously reviewing all of my options, both the obvious and not obvious. To fight convincing myself of the presence of a solution that is not there, I try to obtain distance by pitching the idea to myself after I have done the analysis. By stepping away from the problem, the parts of our analysis that we overlooked for whatever reason become a little bit more obvious. The tough part is that this is a situation where we have to account for our desire to be conservative and balance it with our desire to make something happen. It ain’t easy, but hopefully in discussing it we can improve a little bit.

Jeff Quinton is an author of Baseball Prospectus. Follow @jjq01
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