Falling backward

When it comes to draft or auction strategy, it is always extremely useful to plan ahead and to think about what you want to do later in the draft/auction (from now on, I’ll just refer to a draft) when planning your first moves. But, don’t get too caught up in your masterful late-round strategies.

Whether you’re the type of player that comes into a draft with a full ranking and/or dollar values for all players or if you’re the type that comes in with a few gut feelings and casual sentiments, I bet that you always think at least several moves in advance during a draft. If you use a draft queue to remind yourself of some players you’re interested in in your league’s “draft room,” then you’re definitely planning ahead.

Planning ahead is inescapable and helpful. Perhaps you “reach” for a particular second baseman because he’s the last one left that you put any decent value on. That’s planning ahead. Perhaps you decide to first draft a shortstop because there are still many acceptable closers left. That’s planning ahead.

A form of planning ahead is called “backward iterating” or “backward induction.” The above examples are fuzzy cases of backward iteration. Basically, you think about what you’re going to do several steps ahead and that, in some way, helps you decide what to do in the first or present step. So much expert advice, if you listen closely, is a form of backward induction.

Here’s the thing, though: You must work in the element of chance, of uncertainty. Whether or not you backward iterate, there’s no getting rid of chance. But a common mistake is to put too much faith in your end-of-draft strategies, leading you to make early-round mistakes.

An example: You’ve done your valuations and compared them to some ADPs or consensus valuations. You see, perhaps, that you project Ryan Doumit to be a 15th-round value but that his ADP is (just making this up) in the 21st round. “Ah ha,” you say, “I can wait on drafting a catcher and still get a good late-round value.” Moreover, even though Victor Martinez is still on the board at the end of the sixth round (making him a good value, according to your projections), you wait on getting a catcher, prioritizing other positions first. You’ll draft Doumit in perhaps the 17th round and still make an expected profit.

But what happens if by then someone else has taken Doumit? You may be left with Rod Barajas or some such character.

The problem is that your strategy was contingent on a very distant forecast—in this case, at least 10 rounds into the future. Ten rounds is likely an eternity in drafts—equivalent to forecasting the rain a month out or presidential elections 20 years hence. There’s lots and lots of potential variance. Sure, you can probably forecast where a player will be drafted on average (ADP does a pretty good job of this, almost a fortiori). But strategies such as the one above aren’t built on average; they are built on forecasting extremes. You really don’t want to be too late drafting a position if you’re backward iterating in such a risky manner.

The use and misuse of backward iteration casts a tightrope that we all must walk. On the one hand, drafting a “steals guy” in the second round just because you drafted a “power guy” in the first round seems excessively precautionary. Don’t give up the chance to draft another “power guy” who may be the better value at that point; you’ll be able to get steals later. However, you shouldn’t put all your eggs in the Nyjer Morgan basket for the 10th round either, drafting only non-steals guys till then. Same goes especially for closers. Whether or not you subscribe to some version of the “don’t pay for closers” mantra, planning on getting a specific closer in the late rounds is folly.

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Comments

  1. Jimbo said...

    Great insight! I was talking to my co-manager just this morning about such a thing. Therefore I have much to type. wink

    Problem #1…I like too many young outfielders this year. A roster built from McCutchen, Bruce, Span, Gonzalez, Borbon, Reimold, Gutierrez might not make up the studliest OF in my league, but given where they’d be drafted makes for obscene value imo. I’d expect all those guys to outperform their drafted round by a good bit.

    Using backward induction, I could give less weight to early OF…and I plan to. But you’re point is well taken that I shouldn’t have blinders on either. Justin Upton in the middle of round 3? Tough to pass on him just because I like Nolan Reimold’s value vs ADP. Granderson in the 5th? Love his production there, but I REALLY don’t want to give up Borbon. And so on.

    How does a wise owner weigh the opportunity cost of taking Upton/Granderson early against alternatives in the early rounds? Using your example, maybe Victor isn’t the best pick in the 6th. You’d have to understand what you’re turning down at the same point, and what that alternate player + Doumit looks like compared to Victor + later options.

    And at some point isn’t there a level of sleeper quality that *should* rule out an earlier option? Last year I knew Hill was going to be a great value (not 36HR kind of good tho). I trusted that sleeper pick so much, I was willing to pass on other 2B value…assuming no “early-2B/late-other” combo would be better than “early-other/Hill” tandem. That’s the extreme of backward induction, but a huge aspect of getting max value from a draft.

    Not sure how to find the right balance though. I’m comfortable with my position ranks and I’m comfortable with my value targets. I’m not so comfortable knowing who to take—or ignore—in the 5th round once ADP is out the window and picks become less predictable.

    Seems this is the final piece for me to feel ready going into 2010. If anyone is still reading…how do you address this type of decisioning in-draft???

  2. Jonathan said...

    Thanks Jimbo.

    I’d say the important aspect of weighing whether or not to wait for the sleeper is just how asleep he is in your draft.  Your worry shouldn’t be whether or not the sleeper will deliver as well as you expect him to (that worry should figure into your valuation already).  Instead you should worry about:
    1. What are the chances someone else in your league values him similarly?  someone else may grab him him before you do.
    2. what are your backups in case that happens?

  3. Jonathan Sher said...

    Jonathan, I think you touched on a key point in your response to Jimbo: The degree of risk in backward iteration is correlated to how much alike other owners are to you in your league. The more alike they are to you, the greater the risk one or more is counting on the same strategy as you are for certain targets. I was burned this way in my A.L. roto league last year when another owner made Gordon Beckham a target in our auction; but for that one owner, I would have had him for $3 at the end game; instead my competitor got him for $4.

    My other thought is this: One’s willingness to use this approach should also be related to ones risk tolerance, and not in some generic sense, but the circumstances of one’s auction. This year, for example, I have what I believe is the best keeper list in my league and certainly one of the top 3—high value guys at very low salaries. So rather than risk waiting for a sleeper, I’m much more inclined to pay inflation-adjusted prices for top talent like Longoria than count on Beltre being under-valued. Beltre probably has a greater upside compared to what I expect others will value of him. But I don’t need more high value guys to win. Rather, I need high production guys (since I have most of my budget) and can afford inflation-adjusted prices or even more and still win or finish near the top. My greater risk is running out of available talent before I run out of money.

  4. Will said...

    You make a lot of sense. I’m currently in the process of doing just such planning, and have been sure to incorporate such instructions as “if no 1B by 7th round, draft C. Lee”, even though he really isn’t worth that (not saying he’s really on my list, but just an ex.) in absolute terms, but if he’s the last 1B I want anywhere, I need to suck it up and take him when I know I can get him, since I risked taking others earlier.

    On the flip side, say I have a bunch of Jimbo’s OFs (agree with you, brother) … then I will try to play the ADP odds and wait a long time to grab Borbon. It all depends on what you have when it comes to what you can risk…

  5. Dodger300 said...

    Will, I’m not saying you’re wrong. But just to present the contrarion point of view:

    If so many firstbasemen were picked earlier than you expected, maybe the owners interested in taking firstbasemen early have already been satiated. It may be quite a while before the next one goes.

    For some reason drafts tend to have runs on a position which then peter out at some point. The question is when?

    And sometimes they have a false start and the run goes nowhere. It is like some fans trying to start a wave traveling around the stadium. Many never go anywhere, but the rest last way too long.

    Drafting is all a riddle wrapped in a mystery inside a conundrum. Definitely an art, not a science.

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