If you’ve spent any time talking to successful poker tournament players, most of them will tell you that in large multi-table tournaments with hundreds (or thousands) of players, high variance strategies are one of the keys to success. That doesn’t mean taking stupid chances, but it does mean that in a large field contest with top heavy prize distribution, if you have two options with similar expected value, then the higher variance option is usually going to win you more money in the long run.
The same concept can be used in fantasy baseball contests that share the characteristics of being large (in terms of number of contestants) and have top heavy payouts.
The ideal format to apply this idea is the daily fantasy contest sites, such as Draftbug (my site), Snapdraft, and Fantasysportslive. With contests lasting just one day, high variance strategies are easy to apply, and probably appropriate for any contests with 10 or more participants. While sacrificing expectation for variance doesn’t make sense for the very best players in longer duration fantasy sports contests, it may be beneficial for even the best players in contests lasting just one day, since even the very best players will only come out ahead very slightly more than their “fair share” of the time.
However, there are situations where high variance strategies can be applied to longer duration “global contests” such as ESPN, Rotohog, and Sporting News Salary Cap Challenge and Ultimate. The key is that these are all large contests, with thousands of entrants. The odds that you’ll win simply by making better picks are very small.
The basic idea behind sacrificing “expected points” for variance is that prize distribution is so skewed towards the first place finisher in most of these contests, that if you can increase your chances of coming in first more often, it’s worth reducing your chances of finishing in other positions in the top half of the field. A 10 person daily contest doesn’t reward you for finishing fourth instead of last, and a 10,000 person contest probably pays little or nothing for 300th place. If you want to win money in the long run in these contests, you need to shoot for the top.
One way to accomplish this is to choose players whose performance is likely to be strongly correlated. The easiest way to do this is in daily fantasy baseball contests is to choose players on the same team. If they knock the opposing starter out early and get to face the dregs of the opposing bullpen, that’s going to benefit both of them … leading to a positive correlation in their scores for the day. If the batter hitting fourth gets an RBI, there’s a pretty good chance that the batter hitting ahead of him got a run … again leading to greater correlation among their daily scores. Most daily games won’t allow you to choose all players from the same team (because that would legally count as sports betting), but choosing mostly players from the same team is definitely a good idea in larger contests … particularly if you can identify a bad opposing starting pitcher to go against. For games that give pitchers large amounts of points for wins and saves, you can greatly increase variance by selecting a starting pitcher and closer from the same team.
While this isn’t as effective in longer duration contests, there are some special situations that will allow you to get high “internal correlation” among players over the course of the season. For example, if you believe (as I do) that the Mets’ new home park (Citi Field) is going to be an extreme pitchers park, you can select as many Mets pitchers as possible. Either you’re wrong or you’re right … but if you’re right, it’s going to help all of your pitchers.
The second way to increase variance in fantasy sports contests is to differentiate from your opponents. This is a little trickier. In order for it to be a viable strategy, you need a few conditions to exist. Score should be heavily influenced by one player … for example a game format where a single starting pitcher generally scores almost half of a team’s points for the day. You need to know that most of your opponents are likely to choose the same player for that position. Imagine a game with 20 contestants where the entire score is derived from a single starting pitcher. Now imagine that there are only two starting pitchers available today … Jake Peavy and Mike Pelfrey. Who is the better pick? Almost certainly Pelfrey! While Peavy might have a 75 percent chance of winning, if you win you’ll be sharing your first place prize with about 18 other people. If Pelfrey wins (25 percent chance) you’re likely to win the entire prize. This is a great (although admittedly extreme) example of how differentiation can help you in these contests.
This too is an easier strategy to implement in daily contests. Typically the only place for differentiation in full season contests is if you’re trying to make up ground in the last few days or weeks of the season. However, you can use the same “special situations” like the Citi Field example above to differentiate your team from others. Another example would be in a contest where you need to balance roster value with playing match-ups effectively. If you know that everybody else is going to focus on building roster value, maybe you can win it all by focusing on match-ups at the expense of roster value. The odds are that the masses are correct in their approach. But if you go along with them, your chances of winning are still miniscule. If you take a different approach, and that approach works, you may be the only one in position to win it all.