April 19, 2017

The Quinton

Where To Find the Trades

by Jeff Quinton

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It’s early, but the post-draft, post-auction, post-opening day euphoria is waning already for most fantasy baseball participants. Some players are doing better than expected, and some are doing worse, even though, only 17 days into the season, we surely are looking at an incomplete picture. Regardless, this is the time when some owners will begin looking for trades.

Is now a good time even to be considering trades? Great question. I believe it is a good time to do so, if only because our competition often is looking to make a trade now. Put differently, the way to get the most back in trades usually is to make a deal with someone else who wants to make a trade, someone who either wants something specific, or who wants to trade a particular player. We know that trades can be difficult because of the endowment effect—our tendency to value something more, simply because we possess it; thus, we always are looking for opportunities to make trades with a team dealing with factors that are counteracting the endowment effect.

We will review what factors make people want to make trades (and thus engage in risky behavior, from a loss standpoint), and where to look for them in order to find favorable trade opportunities. As a result, what follows are the places I recommend searching for possible early season trade opportunities, and why.

The roster needs of others

This is the most obvious place to search for motivated trade partners. Obvious, but still worth noting, as searching for trades based on the needs of our competition is not common practice for most fantasy baseball participants. Instead, most start by addressing their own needs before looking for a match—a process that produces far fewer leads than looking at what others need.

This sounds painfully obvious, but every season trades happen where we think to ourselves, “I would have sent a better starting pitcher for Player 'X' than the starting pitcher that got the deal done,” or at least something along those lines. The reason we often do not offer something better is because we were not looking; and the reason we were not looking is that we were either too focused on our own needs, or too focused on making a certain type of trade—one that made the most sense to us.

We overrate the extent to which other people think like we do, and thus always are befuddled when they do not think like we do. So, when we look for the needs of others, we should make sure to not only look for what we would want if we were in their position, but also whatever it is they might want, should they have different values. Doing the latter can be difficult, but a helpful place to start is by looking for clues in that particular opponent's trade history.

The behavioral tendencies of opponents

If roster needs do not lead us to a beneficial trade, the next place worth looking is at the behavioral tendencies of others. While looking for “buy-low” candidates seems like a reasonable course of action here, the reality is that, per the disposition effect, owners are reluctant to sell low because it forces them to admit their previous decision-making error—buying too high. We are better off trying to take advantage of the other side of the disposition effect, which is that people often are too eager to sell high to ensure they make a profit. This is true especially for players who have been acquired for very little. Instead of viewing the trade as giving up a productive player, fantasy baseball participants often will view trading these players as “cashing in"; they can justify such trades by using logic such as, “I was able to turn my reserve pick or FAAB acquisition into an established player, or a pick in next year’s minor-league draft.”

Of course, this behavior is neither rational nor optimal, but that does not mean we should not be the ones to take advantage of it when our leaguemates want to factor the sunk cost of acquisition price into their decision making. The difficult part for us trade-seekers, though, is trying to convince ourselves that someone would be willing to engage in such behavior. The key here is to remember that value is relative, and that a lot of factors (some rational, some not) go into each person’s individual-valuation mechanism and, consequently, we need to be mindful of common human behaviors that could affect any individual’s valuation of any particular player, or group of players. Doing so certainly is extra work, but when it does pay off, the rewards can be huge.

Fighting negative reinforcement in trade exploration

The last point in all of this is: None of this extra work—searching for beneficial trades—is guaranteed to work. And if it were guaranteed, everyone would do it, and it would not provide us any advantage. In fact, we would need to do this just to keep up with the competition. As a result, is it easy to become discouraged and give up on searching for trade opportunities, given the likelihood of failure involved. To beat this negative reinforcement, and ensure we continue to seek these opportunities, it helps to have a process in place. The process does not have to be complex—it could be as simple as searching for trade targets every Saturday morning—it just needs to work as a reminder to begin the search regularly (as opposed to searching on an ad-hoc basis).

Again, this seems painfully obvious, but without such a process—and left to our devices—we would shy away from such efforts. So, stay motivated, even if the payoffs do not come at first, knowing that you did everything you could to give your teams the best-possible chances to win.

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