Thursday, July 30, 2009
Dump trades and free marketsPosted by Jonathan Halket at 4:07am
As an American, I take free markets as seriously as apple pie and baseball. Though some treat free markets dogmatically and think they're always better than the alternatives, most of us prefer to think of markets (free or not) as a means to some ends. What really matters to us is whether we get the health care, the cars, the television shows that we want (loosely speaking). Often times we think that a free market is the best way (or at least just as good as any other way) to ensure that people get what they want. Just as often, we recognize that at least some regulation makes society better—think of anti-trust protections against monopolies.
When it comes to fantasy baseball, there are many commentators and experts that despise the trade veto. They say (paraphrasing), "If two consenting adults think that a trade makes each of them better off, who are we to impose our judgment? Variety in tastes and in player forecasts makes fantasy baseball fun and interesting. Vive la free market." By and large, they are correct. But of course, nobody argues for a completely free market. Everyone, for instance, thinks that a trade should be blocked if two teams collude to enable one team to win.
In other words, we all believe that some regulation in fantasy baseball is good, the question is really just how much. Whereas most believe a trade should be blocked only in the case of collusion or cheating, I believe that there are other (albeit rare) trades that can be rightfully blocked. Dump trades, where a team that is not going to win this year trades its high value players for good keepers, are prime candidates for the veto.
Let's first dispel a myth: a trade between two players is not like consensual activity in the bedroom in the privacy of one's own house. A trade always affects the competitive balance of the entire league (even if only slightly). If a trade totally upsets the balance of the league, a veto may be warranted. Sometimes free markets hurt competition (an economist would say there are externalities in trading market).
Now let's go through some trade scenarios where no one is cheating but a veto could be appropriate.
An owner (let's call him Ralph Wiggum) is new to the league. The first week after the draft, Ralph decides that he doesn't have his favorite player on his team. He trades Albert Pujols and Ryan Howard to Bart's team in order to get Carlos Beltran. Why a veto is warranted: This trade is clearly one-sided and it is seems like Ralph isn't playing to win. It would make the league much less competitive if the trade were to go through.
A team decides to play for next year. Your league only allows one player with rookie eligibility to be kept. The team trades all of his best players to one of the leading teams in exchange for Chris Tillman, the player that this team thinks is the best rookie.
Why a veto is warranted: In this case, since the team is out of it, the owner is willing to pay any price to get the best keeper. If that owner wants Tillman, there is no offer from any other team (besides the one that owns Tillman) that could compete. Why not give up Pujols and Hanley Ramirez to get Tillman? But this dump trade makes the league much less competitive this year. Obviously, the problem here is the keeper rule (more on that in another article), but rather than try and change a faulty keeper rule mid-season, it may just be better to block these kinds of trades.
OK. So all trades change the competitive balance and some extreme ones clearly distort it so much that a veto is called for. But how much is too much? This is a judgment call. Like many others, I would err on the liberal side and be inclined to allow the trade unless it is grotesque. Nevertheless, these kinds of trades are proposed in leagues and they can ruin a beautiful season.
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