Cultural Phenomenon And Still Growing

Considering fantasy football itself is a huge cultural phenomenon, it is easy to see how it intersects with statistical research about, well...fantasy football.  Millions and millions of people every year participate in what is a relatively new invention, and every year more and more join in.  This explosion in popularity is due mainly to the emergence of the internet, allowing people to play from around the world and manage their teams with ease instead of having to search newspapers and manually add up their scores every week.

As far as politics and policy go, probably the most important event in recent memory for fantasy sports was the passing of the Unlawful Internet Gambling Enforcement Act of 2006 which was designed to outlaw gambling over the internet, but specifically excluded fantasy sports.  This piece of legislation could have effectively killed fantasy sports across the board, but instead it considered them a game of skill.

From a more macro perspective, economic and statistical research is becoming more and more important in today's society due to continued financial struggles for individuals and entire nations around the world.  It will be key in the coming months and years to figure out an economic policy that can benefit both the United States and her allies while taking advantage of the limitless opportunities provided by such a global and interconnected economy.  Since fantasy football is effectively an exercise in portfolio management, it can actually be used as quite a teaching tool in asset management and budgeting among other things.  Especially nowadays with kids doing their learning through a number of previously unconventional methods, I think fantasy sports are a great, fun way to introduce adults and children alike to important economic and financial lessons.  Hopefully they continue to grow and evolve to accommodate more and more new users in the coming years and add to the already substantial impact they have had on pop culture in the US as well as the wallets of those who enjoy the game so much.
  

Are They Really Your Favorite Team?

An interesting study was done recently on how fantasy football participation affected real-life football fandom.  The article is rather lengthy, but it is a well-constructed look at just how much people care about their fantasy team versus their chosen "favorite" NFL team.  As a fantasy football player myself, I can say that the results were not that surprising.

The study found that playing fantasy football would increase overall interest in the NFL because (fantasy) managers have players on a number of teams, not just their favorite team.  This leads to increased viewership for NFL games as a whole since millions of people will watch all the games on Sunday as opposed to just the one their team is involved in.  This results in a impact on not only the NFL, but by extension all of their sponsors as more revenue is presumably generated with more people viewing advertisements on a weekly basis.  Not surprisingly, the level of participation in a fantasy league was also a decent indicator of NFL fandom. Those who are deeply involved in fantasy football, managing multiple teams and leagues, are also those who show the most interest in the NFL as a whole.  As such, the NFL launched its own sponsored fantasy football league just a few years ago in order to keep demand high and to capitalize on the obvious relationship the league already shared with fantasy players.

As far as economics is concerned, the marketing aspect of the relationship the two entities share is the most significant.  With 30 second advertisements during prime time games costing upwards of half a million dollars, the more viewers that can be pulled in the better.  The symbiotic relationship the NFL and fantasy sites share has been improving each year with newer and more user-friendly websites and apps designed to lower barriers to entry and get more and more people playing the game.

A more interesting find from the study was that nearly half of respondents to the survey would prefer their fantasy team to win in a given week than their "favorite" NFL team.  This emphasis on individual performance and not on overall team success as well as the fact that many leagues are played for a cash prize has led to many managers forsaking their chosen football team fin order to cheer for their fake football team.

So, which team would be your favorite? Your hometown NFL team or the team you carefully assembled on the internet to win bragging rights over your friends?

Hal Varian: Google's Personal Economist

Hal Varian is an extremely important figure in economics today, as he holds the position of Chief Economist at one of the most powerful corporations in the world: Google.  Before his current position at Google, Varian had an impressive resume of teaching positions, including prestigious schools around the world such as MIT, Stanford, and Oxford.

One of the main ideas Hal Varian is known for is "combinatorial innovation", or taking multiple ideas or products and combining them into a new, often more efficient product.  For example, the iPhone is nothing more than cell phone technology, GPS, music, etc. technology put into one convenient device.  All of these technologies existed long before the creation of the iPhone but were combined in a creative way to create something new.  Now at Google, Varian will employ his combinatorial innovation philosophy to come up with the next set of awesome gadgets and web services.  What do you think are some products that could be combined in a new way to create a unique and innovative product?

The work Varian does with Google is also a step towards even more targeted marketing than we currently see through internet ads, local TV ads, and ads on our smartphones.  While this may sound like an annoyance considering most people aren't terribly fond of targeted marketing in the first place, the corporations doing the advertising are always looking for the next best way to reach their target audience.  Nowadays, the best way seems to be shifting from TV and radio ads into the almost exclusively online realm.

As his title at Google implies, economics is Varian's area of true expertise; more specifically microeconomics.  He has written numerous papers on microeconomics, econometrics, and on the economics of information technology and the latter is becoming more and more important every day with the continued expansion of the internet and web-based business.  His foresight in the information technology industry and his wealth of economics knowledge has contributed in part to Google becoming one of the largest and most successful corporations in the world today, and it is safe to say that anyone who had a hand in making Google what it is today has had a significant impact on the lives of most people in the internet-faring world.


most of the information herein was gathered from: Hal Varian on how the Web challenges managers

Even the "Experts" Aren't Experts

Fantasy football is no different than any other entity that is heavily influenced by the principles of statistics and economics.  That is, it is a game of chance that with some analysis can be interpreted with some scientific perspective.  Many "experts" like to make guesses on who may be in for a big statistical week, yet even the best experts only have a success rate of only around 60 percent. This results in a lot of variance week to week unless players chose one expert and stick to their projections religiously.

Confidence is Key:

Economically and statistically speaking, confidence intervals are an extremely important part of predictions, yet in fantasy football only a single numeric prediction is given on most websites.  The image below shows player projections # in the middle) along with the confidence interval (the length of the bar), allowing managers to decide whether to take a high risk high reward player or a low risk but consistent player week-to-week.  Additionally an aggregate of the many possible projections by experts and algorithms, known as gold mining, can help to lower the variance in predictions by using multiple sources and predictive methods.  This can increase confidence in any given pick, and result in more consistent performance over the long run, for a fantasy football team or a portfolio of investments.

Earlier Risk, Longer Reward (maybe):

Economists typically say to invest in riskier investments when you are younger, since your time horizon for recovering any losses is much longer.  Similarly, in fantasy football it is typically easier to take risks on players with lower floors, but higher ceilings in the beginning of the season because winning games early on is key, but it is easier to recover from an 0-2 start than it is to recover from being 2-5.  Oftentimes, these "flier" picks as they are known in fantasy can make or break a season by having one or two huge games that are not indicative of their overall performance but can reward owners bold enough to take the risk on them. A good recent example of this is Andre Holmes, who has almost 38% of his season's total points in a single week.  However, the nature of such investments (players in this case) makes it so that they may also gain you nothing so it is inadvisable to take on such risk later in life (or later in the season).

In fantasy sports as in economics, when it comes to prediction the early bird gets the worm.   Managers who take the leap and start the high-talent rookie can reap the rewards like an investor who thought Amazon.com wasn't such a crazy idea back in the day.  The other side of the coin of course is people who invest in things like Terralliance, a massive failure of a petroleum company.  Although it may be a fun distraction for millions of people, fantasy football is also a great tool for learning about investments for those who care to look a little deeper into it.

Fantasy Football: The Game Within the Game

As most people are likely already aware, fantasy football is massively popular among today's NFL fans, growing into an estimated $70 billion market with millions and millions of users.  It is no surprise then that economists and statisticians have taken a keen interest in this new market and are applying their expertise to discover ways to maximize its value.  In a time where individuals like Matthew Berry can make a living off of simply guessing at a football player's performance (more professionally known as a "fantasy analyst") on a given week, it is certainly an attractive proposition for anyone who could find a way to take these guesses and turn them into something slightly more predictable.

Fantasy Football is thought to have begun with the GOPPPL, or the Greater Oakland Professional Pigskin Prognosticators League, in 1963.  While that remains a mouthful to this day, the game it created has changed dramatically (as many things have) with the advent  of the internet.  Online drafting has allowed players to draft multiple teams in a short amount of time, oftentimes drafting a few teams at once.  Back in 1963, drafts were done exclusively with a pen and paper, and stats were not automatically updated within seconds of a play occurring; fantasy managers had to find the box scores of every game in the newspaper and tally up their scores by hand. Nowadays, because of the size of the market fantasy sports are becoming more and more of a force in the economic and political world, even President Obama has been said to play fantasy football.  So how did fantasy football become such a pop culture phenomenon?

To put it simply, fantasy football has become so popular because it is a form of gambling that requires skill rather than luck (though many losing managers would disagree).  As a result people who play often and keep up with current news in the Fantasy world are perceived as having more skill and are capable of winning more money.  For an economist fantasy football is still a sort of gray area, meaning while there are ways to predict market performance the market is based on humans playing a game rather than the interaction of various economic markets.  As an aspiring economist and avid fantasy sports player I hope to be able to explore the means by which fantasy performance is predicted and how it can be related to real-world economic and statistical strategies.