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.
Really great article and blog. I'm pretty deep in the fantasy hole. I'm insufferable to be around on Sundays and I spend far too much of my time trying to get an edge.
ReplyDeleteI read an interesting thing recently about the so-called experts. The thrust was they get all the benefits if one of their predictions is correct, but suffer no consequences. When they make suggestions for bye week fill ins and waiver wires, nothing is on the line for them. Thus they're able to make pretty wild predictions or speculations. However, were they to be financially (or I guess professionally) penalized, then you might see far fewer "experts" and far more accurate picks (because they would necessitate far more research). Anyway, interesting thought that meshes well with what you wrote.
Growing up without cable TV, I never watched (nor had any interest) in sports. When I came across your blog, I was ready to hit the back arrow. I was excited to see a mathematical take on the fantasy football process, and you have made me more open minded about the benefits of fantasy football. I wish I had minored in business/ had the time to take an economics class. I never knew about the time horizon theory for making risky investments, but I will take this into account as I graduate and start to look at building my life. The infographic really helped me understand the concept since I was not familiar with the topic.
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