In all honesty, the Jays would probably have been best off burning it to the ground two years ago and trading Halladay then (around the time CC Sabathia was traded) for a boatload of prospects.

When you play in the AL East, you don't have the luxury of building a very good team (as the Jays have done the past few years) but instead must construct the Best Team In Baseball since you're directly competing against 2-3 of the best teams in baseball just to get a chance at the playoffs.

OK, here's my eternal quibble with the line of reasoning presented here. As things stand now, if the Jays don't trade Halladay at any point this season, they'll likely get the 2 draft picks AND...AND...they'll have received the benefit of an additional year of service from one of the short handful of best pitchers in baseball. I don't know how to value that alongside the value of unnamed, presumably, high quality prospects but it's got to be worth SOMETHING, right? I mean, doesn't the value of having Roy Halladay on your team for the 2010 season have to be factored into this equation? Is there an obvious flaw in this reasoning? Tell me.

Thoroughly enjoyed the article, but must slightly disagree. I believe you're saying that even if the best offer the Jays get for halladay only puts them minimally better off than 2 low round compensation picks, they should take it because it's better than nothing. But it largely depends on the goals of the Blue Jays.

If they don't feel they'll be competitive for the playoffs with the prospects netted for halladay, then maybe their goal for the next few years is just to win as many games as possible. there is no reason to accept the trade then unless the prospects provide more wins than halladay will provide in 2010, which as you say, isn't likely going to happen.

There might also be an interest for a small interest team to devalue prospects and overvalue veterans. If the blue jays hang on to halladay and some contender misses the playoffs by a game or two, I'm sure the jays will gloat, "probably should have made a better offer for halladay, huh?" there is no tangible value in doing this, but may work to their advantage in the future, an aspect missing in the otherwise apt ultimatum game analogy.

This also only represents baseball interests. There are various economic interests that, while you may disagree with, are factors when running a baseball team. Sure the Jays might be better off getting something rather than nothing for halladay, but if that something discourages enough Ed's from Scarborough, then maybe it's not worth doing.

Baseball is played to entertain fans over the course of a summer. Should fans of every team with a sober assessment that "the chances of making the 2010 playoffs are minimal" decide the games are not worth watching? At least one in five was last year in Toronto, playoffs or not.

Russell,
I'm a big fan of behavioral modeling and the Ultimatum Game in particular, but isn't the Blue Jays situation a little different than the Ultimatum Game due to the closed environment that MLB teams function in?

In the Ultimatum Game, I don't really care how much money my deal-proposing partner gets, because I know I'm going to win something. My partner getting more money than me never hurts me. In MLB, if the Blue Jays send Halladay away for a tiny prize, it might improve one of their competitors in the long-term.

While an "unfair" deal might benefit the Blue Jays even if it's tiny returns, it does make one of their competitors better, and especially an in-division trade might screw the Blue Jays down the road. If they get any offer from the NL, it might make sense to get Halladay as far away as possible, but I'm not sure if it's always best to unload him for anything no matter how small the best offer might be.

I studied rational decision theory at university, and your description of the Ultimatum Game is accurate. Unfortunately, anyone who understands the Ultimatum Game immediately loses faith in humanity, because the way humans behave is fundamentally irrational.

Data shows that who starts has very little impact on how many people show up for the game. We've had that data for years and years now.

Giving up on a season, however. That certainly does affect how many season tickets you'll sell. Even granting that first paragraph, it probably makes financial sense to hang on to Halladay unless you do get full value for him. At least until the trading deadline, maybe then you take the best you can get for him.

Can't reply to posts, so this has got to go here. Why would acting in accord with 'fairness' rather than maximizing your utility cause you to lose faith in humanity? Not that I'm counseling you have all that much of it, mind you. Just strikes me as a pretty different perspective.

The problem with the analysis is that it assumes the Jays have no ption, but they do -- they have the opportunity of playing the Ultimatum Game again at the July trading deadline.

The question to ask is, will the Jays get more trading Halliday now for a team that wants him for the whole year or will they be able to ignite a bidding war among contending teams -- like Cliff Lee or C.C. Sabathia -- during the year?

In the Ultimatum game the arbiter of fairness is the single person tasked with dividing up the money. The rational response is to accept any offer that is in excess of your starting point, which is zero money.

In the Halladay example, fairness is arbitrated by a number of participants making offers, where the rational response is to accept the value-maximizing offer. To say that the Blue Jays should accept any offer because it is greater than zero assumes that the game is being played by the Blue Jays and one other team which, if Anthopolous is doing his job correctly, shouldn't be the case.

I like the ultimatum game and I am of course familiar with how his extra wins won't translate to bucks for the Jays if they don't contend, but I think the picks are worth something; I think the PR hit on a bad trade would be substantial; and I think there is always a chance that the team ends up contending--maybe it's not likely but a lot of baseball is luck. Then you need those extra wins.

Beyond that, there are other concerns with taking "a nickel" for him. One is that the team is setting up a bad precedent for future deals, where other teams think you'll do bad business just to unload a player. Think about it this way: if the new administration already had a reputation for unloading just to do it, would they get good or bad offers for Halladay? Yes, the potential trade partners have to compete against one another, but you don't want to make it any easier for them.

Furthermore, there is some value to a game of chicken here. If you don't get a deal and you aren't in a rush to get whatever you can, you can wait until another team decides they want him bad enough to pay handsomely. Could be now, in March or at the trade deadline, but it is pretty senseless to take your nickel when you might get a couple of Franklins down the road.

ddrezner, Halladay came out and stated that he will not accept a trade during the season. The no-trade is big since it increases the possibility of fewer teams able to trade for Halladay.

I'd even go back one step further...who has decided that "the chances of making the 2010 playoffs are minimal"? Let's go all the way back to 2009, where BP's staff correctly picked 3 of the 8 playoff teams, with the Rockies picked for 4th place in their own division. Or further back to 2008, where BP decides the Marlins have no chance to even pass the Nationals, and yet they fall just 5.5 games back of the wild card AFTER losing Miguel Cabrera (what was his WARP that year?) Even at mid-year, teams consistently surprise us with a late-year explosion (2007 Rockies) that prove demolishing a team in January based on some predictive model does nothing but de-moralize the fan base. Hell, assuming you have one year of Halladay, break the bank and give somebody a massively front-loaded contract to provide some offense with an opt-out clause after one year. The error margins on preseason predictions are so wide that making just one incorrect assumption can actually be the difference between success and failure. But throwing in the towel now is almost guaranteed failure.

It's not an ultimatum game, it's an auction. It could only be an ultimatum game if there were two teams in MLB. Since their are multiple suitors, the offer the Jays are likely to accept should be based on the demand for Halladay which will almost certainly be above the level of the draft pick compensation.

Thanks all so far for the comments. My 'reply to' button is also malfunctioning, so I'll have to do one big round-up here.

Several of you have brought up good points about other variables which will no doubt play into the Blue Jays' thought process. Of course, nothing in baseball is simple enough that it can fit into a few thousand words.

A couple people have brought up whether this is a true analog to the Ultimatum Game more properly. It's true that a year of Halladay and his compensatory draft picks aren't worthless, but there's probably a better offer out there. True, there are multiple teams (I assume) making offers, but eventually, they will all bid up to their highest point. One of them will be the best. That's when it becomes a two player game. What if that offer isn't "equal value" to Halladay? So long as it beats the two draft picks, then the Blue Jays should take it. The idea of taking things to the trading deadline is a rational idea, but eventually, you have to make a decision. It's possible that you get a better deal in July, but at that point, you might still find yourself not getting equal value.

I think some people misunderstand here. It's not that the Jays should take the first offer that comes along that's better than the two draft picks. They should build a market, encourage teams to bid up, etc. When everyone says "... and that really is my final offer" they should take that one.

The other issue is whether there is some value in not cooperating, whether in the form of "hey you know you screwed the other guy over" (which, added to $3.00, will get you a cup of coffee), or whether building a reputation for further trades is worth it. (Something like: "Anthopolous is soft and will take less than full value.") I don't think that holds up in this case for a couple reasons. One, Halladay is a major stakes game. How often do you trade a guy like him? You need to make sure that you get something for him. If that means you get a little less when you trade some random middle infielder next year, so be it. Second, I don't know that it really is "giving in" here as much as bowing to the reality of the situation. Structurally, the Jays are screwed. They have no leverage other than "make a better offer or we'll send him to Team B," but even that has its upper limit. When they make another deal where they have some leverage, they can hold out all they want. They can spin this one (correctly) as "what were our other options?"

Yes, the fans are going to be mad. Trading Halladay is an admission that the Jays don't think they have a chance for the next few years, and that's discouraging, because Americans... oh right... want a winner and want it now, and most of the time, you can only have one of those.

An additional complication is that Halladay, with his full no-trade, has it within his power to pretty much reduce it to a "one-suitor" negotiation. I think the no-trade complicates the Blue Jays' position a big bunch.

It reminds me of the Santana deal from two years ago. I didn't like the trade at all back then. (Could some of these GMs accept just two better prospects in a trade than the four or so they think they need in total number of nobody-yets to justify these things). My argument at the time was that if you couldn't make a good and worthwhile trade, keep Santana for the last year and just take the draft picks. The Twins lost a tie-breaker in the 163rd game to the White Sox during the following season. We all just might know what sort of difference Johan may have made in that pennant race, don't we?
But the only very large difference in this year's conundrum concerning Halladay is the fact that if the Jays kept him for another season, they themselves speak as if they see no chance to contend whatsoever.

The point here is the Jays will get nothing if they dont trade Halladay, but what is lost in that logic is, that when the Jays signed Halladay for 4 years, they would get 4 years of service from him. The fact they will not be in the playoff hunt in 2010, doesnt negate the fact he will make the Jays better than they would be if he didnt pitch for them. Someone will have to take the hill 34 times and log 250 innings for them. Why not Roy? In a sense he is bought and paid for...well they have to pay 16 mil to him, but when ARE the Jays going to be competitive? The Mets package for J.Santana wasnt a difference maker, nor was Montreal's pkg for P. Martinez. If your not going to get a 'goodd deal, why not let the player stay, and take the picks when he walks.

I think by being willing to walk away from the trading table and allowing Halladay to become a free agent (or at least appearing to be willing), the Jays still hold some power over other clubs. Other clubs know what Halladay is worth, so in a sense it's the Ultimatum Game for other clubs as well. Do other clubs give up some top prospects and still come out ahead with Halladay, or do they try to screw Toronto and risk getting nothing out of the opportunity because they think Toronto should act rationally?

Did the Jays win the deal to let Rios go to the Sox? If he returns to a near All-Star caliber CF, then they lose a bit, but there is just as good a chance he never reclaims his past flirtation with glory. I'm a Sox fan and am glad they have Rios. Was it fair the Jays got no one in return? They received relief from the contract and in that sense the reward was well worth the risk.

Why does a GM have to win each and every deal? They don't. I thought Ken Williams gave up too much for Peavy but as I read more about it the deal appears more solid. I wish the Jays would give up Wells to the Cubs or Sox too. The Cubs can give them Bradley for an almost even switch of bad recent memories. Please leave Rios in CF too.

As a Dodgers fan, I just find it interesting that Chad Billingsley has to be in the discussion or there is no deal but all the rest of the teams "in the hunt" have their unproven prospects that they can march out there. Just stick with Halladay if you can't reach a deal for him say last year's trading deadline. He's breached his value point and no one is going to give poo for him because good young quality baseball players are worth more than hired guns and because I am censored for wanting to say shti

There is a further complication or two that makes it even more challenging for Anthopolous and an even closer parallel to the Ultimatum Game.

There is a sound argument that he should do whatever he can to guarantee that Halladay does not end up with either the Red Sox or Yankees. His goal, after all, is to finish ahead of one of them sometime soon. He's only going to trade Halladay within the division if he gets overwhelmed relative to the value of the two picks, and it's unlikely that either the Sox or Yankees will make that kind of offer; they will both be content to let him go elsewhere, as they were with Santana.

That leaves the Phillies and Angels, and Halladay is very unlikely to sign an extension with the latter because he wants to play on the East Coast. In fact, he's stated that the Phillies are his ideal destination.

So it's basically the Phillies (who are reportedly trying to deal Blanton's last arb year to create salary space) or bust. Trading Halladay for Michael Taylor and Travis D'Arnaud would be a huge win -- you'd save Halladay's 2010 salary, save the signing bonuses on the two picks, improve your 2011 draft position, end up with two better players more quickly, and guarantee that Halladay does not pitch the next five years for a team you're trying to catch. (The Phillies would then let Cliff Lee walk a year from now and recover some of the value they gave up with those two draft picks.)

Getting two picks for Doc and having him sign with the Phillies would be clearly less desirable; getting just the two picks and having him sign with the Yankees or Sox would be a disaster.

Of course, as good as it is when examined rationally, this trade would give Ed from Scarborough an aneurysm.

Hell of a dilemma. But if I can explain the logic so succinctly here, why can't Anthopolpus explain it to Ed? (You'd leave out the "we're trying to get worse" part, of course.)