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Here is a question: which of the following two scenarios do you prefer? You are preparing for an outbreak of a disease that will kill 300 people. You have a choice between two options. The first will save 100 for sure but the second will possibly save all 300 one third of the time and in all other scenarios all 300 will die. What do you do?

Let’s pose the question a different way:

We have the same scenario as above; you are facing a disease outbreak that will kill 300 people. Now your choices are different. Option A will allow 100 people to die and Option B will let no one die one-third of the time but all 300 will die two thirds of the time. Now which do you prefer?

Experiments have shown that even though both all of these situations are exactly the same most people will select one of the options presented in the first framing of the question rather than the first because in one they are “saving” lives and on the other they are ‘losing” lives. This is because they are “loss averse.”Another way to frame the principle is that we place a higher value on what we have than what we do not, even where the expected value is the same. This is a big problem for fantasy owners in keeper leagues.

We have had a lot of discussion about keepers in our chats on Sunday and in e-mails from readers on the Premium site. In most scenarios where subscribers ask about keepers the marginal decisions are posed in terms of “I want to keep player X” or “I am leaning toward keeping player X,” even where this is a clearly marginal decision or worse.

The most common scenarios where this occurs is with riskier younger players whose value is not yet established. Ask yourself this: would you keep a $10 Pablo Sandoval? What about a $14 Joey Votto?

As with many things, the answer is not automatic and goes beyond whether these individual decisions are profitable. Owners should not make decisions merely because they not want to make the wrong call. In both of the above cases the players may very well put up a $20 season in 2009. But that does not mean they should automatically be kept.

1.      Is my team a contender? If so then you should be more likely to cut them loose. If your team has a good chance to win then any marginal decision should be made with an eye to having more money at the auction.

2.      How do others view these players? In an auction this is an obvious consideration. What good does it do you keep Jay Bruce at $12 if you can get him back at ten? Note that you cannot ever be certain what will happen; he could go for $10 or he could go for $20 if you throw him back. You cannot know, but should not be risk averse and keep him merely because of a small profit.

3.      If my team is not a contender can I trade the player? This mostly occurs with guys that have big upside but are risky. Often you can gamble that they will bust out and become a trade asset. One example from a reader was whether to extend Matt Lindstrom to $6 through 2010. The goal here is to be flexible; if he is so good that he is worth $25 then you keep him; if he is worth $12 then you trade him and try to turn him into players you have control over for a longer period of time.

4.      When will I next be a contender? Like the example with Lindstrom; if you think you can contend in 2010 but not 2009 then act accordingly. If it will be 2011 then act accordingly. Gamble and extend that $1 player to $11 if it could be profitable.

This is a quick list and the considerations are more numerous than these, but hopefully this will help focus the decision-making process on more variables than just “is the player a good buy.”  The way to handle these scenarios is to trade this type of player to another owner who is loss averse; they don’t want to lose out on the upside so they will gladly take him and most times will overpay.

A hypothetical: you have David Price at $5. What do you do with him? Feel free to comment below.

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written by len, February 23, 2009

i would gadly buy price for 5 in my 12 team 5x5 keeper. i have a think he will go for more like 12 though and at that "price" i will bow out in favor of someone more established. i should say that i think i have good keepers and am playing for this year and also we have 5 dollar inflation year to year

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written by HotCornerHero, January 31, 2009

David Price as a $5 keeper is a must keep, even if he doesn't pan out this year, I think that he will be good though.

But his potential to earn $35+ in the next couple seasons is more then enough to warrant holding onto him at $5. Talk about value play.

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