Philosophers have spent a great deal of time classifying the wide array of logical fallacies, but one in particular stands out as wreaking havoc for many who play fantasy baseball.
We’re talking about the “Gamblers’ Fallacy,” the belief that because something unexpected has happened in the past, the future will compensate. The most cited example of the Gamblers’ Fallacy is a coin flip—five consecutive coin flips yielding “heads” doesn’t mean that a sixth toss becomes more likely to land on “tails.”
In fantasy baseball, we see the Gamblers Fallacy in various ways.
During the season, some may decide that a player suffering through extraordinarily bad luck makes a worthwhile trade target. This course of action is wise only if the owner has a realistic expectation of what’s most likely to occur next: One can’t expect the bad-luck player to have a streak of good luck to even out the fates of fortune; one can expect only a return to the norm, or performance stripped of luck altogether.
A far more dangerous application of Gamblers Fallacy happens in drafts and auctions.
Those who love baseball are up to their ears in player hype, especially concerning young prospects. Often, we witness performance not living up to massive expectation, such as the recent cases of Delmon Young, Jeremy Hermida, or Rickie Weeks, among many others.
Fantasy baseball enthusiasts often have a hard time adjusting their expectations. Indeed, some perceive a sense of “discount” when they are able to get a player with great upside who has thus far failed to match the puffery.
Unfortunately, the perception tends to be illusory for three reasons.
First, player projections tend to be extrapolated from past performance. Young, hyped prospects have short track records and their forecasts are given with little supporting evidence and a tremendous amount of volatility. Just because touts once projected Hermida as having a great chance of hitting 30 home runs doesn’t mean that he’s more likely to outperform new, reset projections.
Second, upside is a hard-to-quantify variable whose scarcity tends to be overestimated. Perhaps Delmon Young still has the potential at his young age to one day be a 25 HR-25 SB superstar. Just because he maintains this upside doesn’t mean he’s much closer to fulfilling it than someone like Colby Rasmus, who will be coming to the majors soon and goes largely undrafted in fantasy baseball leagues.
Third and finally, the elasticity on a young player’s draft position or auction price also tends to be overestimated. Demand on upside isn’t fickle. Here are some examples: Corey Hart’s average draft position has climbed more than 14 percent from drafts last year. Yovani Gallardo’s has climbed about than six percent. Edwin Encarnacion’s has climbed more than 16 percent. Did any of these three players do anything extraordinary in 2008 to merit a jump in expectations into 2009? Not really.
Bad luck, disappointments and unfulfilled potential are a natural part of baseball. But when considering player acquisitions, one shouldn’t assume that any of these things translates to the opposite outcome. The gods of fate aren’t that kind.