The Economics of Fantasy Football

Hey guys my name is Matthew Fairburn. I operate 2guys1football.com and have written a few articles. Let me know what you think.

    Drafting a fantasy football team can be a bit overwhelming. All of the names and numbers are enough to make your head spin. However, the application of some basic economic principles can help slow things down and make you a more effective drafter.
    Fantasy football owners everywhere want one thing : value. Maximizing value is critical to the success of a fantasy football team. But how exactly does one go about maximizing value? First we must define value. Value, in fantasy football, is defined as drafting players who out perform their draft position. Simple enough. The economic equivalent is consumer surplus, when the price one is willing to pay exceeds the price paid. This is where rankings and projections come into play. Once you have ranked your players, you go through the list searching for players who present a consumer surplus, or in fantasy football terms players who will outperform their draft position. This can be tricky no doubt about it, but finding these players will form the basis of your draft strategy. A fantasy football novice could not even begin to apply the economics of fantasy football, because they would not have the projections to do so.
    Now that you have identified which players present a consumer surplus, you must analyze each player along with his average draft position to construct the framework of your strategy. For instance, I have identified Michael Bush and Arian Foster as running backs for which I would be willing to pay an RB2 price, but have a market value of RB3. Meanwhile, I also have targeted James Jones and Legedu Naanee as players who I would pay top thirty WR price for, but will only have to pay top fifty price. I have identified two areas where I can score some consumer surplus, now I have to draft accordingly. Knowing that I have my RB2 and WR3 locked up in the later rounds helps me plan out that in the early rounds I will have to land my RB1, WR 1 and 2, and QB 1. By then it will be the fifth round where Michael Bush and Arian Foster are there for the taking. Now it does not always work out this way and that was simply hypothetical. If in round five a player you have ranked as a WR 2 is there as your WR3, you can pull the trigger. Or if Bush and Foster are both gone you have to find consumer surplus elsewhere, which is why this strategy presents some risk and requires the owner to gamble.  That is why thorough projections, rankings, and target lists are so important.  If you have done your homework, and have the appropriate players targeted for each round, you minimize risk and maximize value.
    Conservative owners are going to point out that this strategy is too reliant on sleepers, making it far too risky. However, in a game that is predominantly luck, if you have the ability to find the late round gems than why wouldn’t you use that to your advantage when formulating a draft strategy? Add some skill to the equation. Playing it safe and designating certain rounds to certain position leaves you blind to value at other positions. In economic terms your opportunity cost (the benefit derived from your next best alternative) increases. For instance, if you have decided to go with a popular draft strategy that calls for two running backs in the first two rounds there is a chance you will run into trouble. You take your stud back in round one, round two rolls around and running backs like Cedric Benson, Rashard, Mendenhall, and Ryan Grant are sitting there. Meanwhile, wide receivers such as Brandon Marshall, Calvin Johnson, and Roddy White are out there. Your predetermined draft strategy gives you one of those risky number two running backs, while passing on the opportunity of having a legitimate number one wide receiver. In the third round you are left with risky prospects like Marques Colston and Anquan Boldin to fill that number one receiver void.
    Now, RB - RB loyalists point to the deviation between the top tier backs and the middle tier backs, which is notably higher than the deviation among tiers of other positions. That is a useful tool, but all it takes into account is the end of season numbers, comparing the point gap between RB10 and RB 30 to the same gap between WR10 and WR30. What that deviation does not take into account  is where all of those players were drafted. Since we cannot see the end of season stats prior to drafting, that deviation is not as valuable as some make it out to be. All that will tell us is which position is most important to correctly project. Thanks standard deviation, I’ll be extra careful with my running back projections this year.
    So when it comes time to draft your team this summer, make sure your homework has been done and your projections and areas of consumer surplus are mapped out. If you are confident in your projections, and willing to take some calculated risk you could have a championship team on your hands. If you’re a bit uneasy about your projections, go ahead and draft RB - RB or whatever cookie cutter draft strategy you’re loyal too and kiss that league entry fee good bye.