Thursday, January 29, 2009
Managing your money in Rotohog
Posted by Alex Zelvin at 4:29amRotohog Baseball is a fantasy baseball game with free entry, large prizes, and a unique "stock exchange" trading mechanism. Thousands of players compete in a global contest to see who can accumulate the most points. Like some "salary cap" baseball games, Rotohog gives you the opportunity to turn over your entire roster every day, greatly increasing the importance of taking factors such as opponent and park into account when determining your lineup.
When Rotohog first launched in early 2007, one of its main selling points was its unique ‘stock market’ trading mechanism. A great deal was made of the fact that the pricing algorithms had been designed by Kent Smetters, a University of Pennsylvania professor of economics, who was one of the founders of Rotohog.
During the 2007 season, building up roster value through active trading was one of the keys to success at Rotohog Baseball. From a starting roster value of $300, the top teams all spent the bulk of the season above $700, and most of them consistently had the $900 or more that they needed to acquire whatever players they wanted without any limitations. The greatest key to success was having a lotof free time, and being at the computer to instantly sell players within seconds of games starting. This led to most players not really having any chance to be competitive, and ultimately led Rotohog to adjust the rules to reduce the importance of roster value the following season.
In 2008, Rotohog used a system of transaction fees tied to roster value to limit how much Rotohog money players would be able to accumulate while actively maintaining their roster. The transaction fees escalated sharply as a team’s roster value increased past various thresholds from $350 (where fees went from $.10 to $.75) up to $450 (where fees went from $2.50 to $4.50).
I knew that my edge over the competition would come from making superior decisions about which daily match-ups to exploit, which meant that I would need to turn over most of my roster each day. That virtually guaranteed that I would be stuck at $350 or below for the entire season. Luckily, I also knew that my opponents would sometimes need to trade players to ensure that they used their entire 162 game allotment at each position. With the extremely high transaction fees I was confident that no contenders would be able to maintain a roster value above $450. I felt that actively playing match-ups with a $350 team, I would probably be able to outperform anyone employing a “buy and hold” strategy using a $450 team. It turned out that I never had to determine if that was true, because none of the top teams managed to stay above $400 for long. In fact, most of us spent almost the entire season between about $330 and $380. The escalating transaction fees had virtually eliminated the stock market trading as a key part of success in the game. I completely ignored roster value for the entire season, planning my transactions entirely to maximize scoring each day, and didn’t suffer at all for it. My ability to do that was dependent on having a schedule compatible with Rotohog’s trading floor hours though. I know several skilled players who were not able to trade until shortly before games began each day, and instead of their roster almost magically hovering around $350 for the whole season (as mine did), they often found themselves at the minimum salary of $250, which made fielding a competitive team almost impossible.
Rotohog staff members have indicated that trading floor hours are likely to be one of the few areas of the game format that will be tweaked in 2009. Last year the trading floor didn’t open until noon Eastern. That was a really bad idea, since it meant that on the weekends, people had only a 50 minute window to be at the computer and make roster moves before their lineup would begin to lock in for the day. Rotohog will almost certainly have an earlier start to the trading day this year, or even allow very late night trading as they did in 2007. No matter what time they settle on, players who are able to make transactions shortly after the trading floor opens will have an advantage in maintaining a reasonable roster value. If you can’t generally make trades early in the trading day, you’ll need to start sacrificing some of your daily match-ups in order to avoid always buying your players at their most expensive and selling them at their cheapest. The key to this is not to have players in your lineup the day before their team has an off day (when you’ll get stuck holding them as their price drops), and to try to buy your starting pitchers several days ahead of time to avoid paying peak price.
Note that most of what I’ve discussed here will be affected by whether Rotohog changes the transaction fees to escalate more gradually and whether they still have a five day ‘holding period’ for starting pitchers. We won’t know for sure what adjustments they’ll make until their official launch date on February 23rd, so for now I’m assuming that there won’t be any changes.
Compete against Alex and other players in one day fantasy baseball contests at Fanduel or visit his site, Daily Baseball Data, which has daily hour by hour weather forecasts for all games on one screen and batter vs. pitcher matchup data for the full day's schedule.
How bad of an idea is it to use a buy-and-hold strategy where you buy players on their off days?