Fantasy Baseball Mind Games: Mental Accounting

A favorite on mine, I thought this guy was untouchable until an offer came

along that could help me win now. Image courtesy of Brothm.

We’re going to jump back in and look at some of the mind games in fantasy baseball. Last time we looked at ‘Anchoring‘, or how we can attach to a player often based upon thoughts to no longer hold any validity, yet there can be no changing our mind.

This time we’re going to talk about mental accounting.

Mental Accounting

Mental accounting is a financial term that refers to the tendency for people to separate their money into different accounts on a variety of subjective criteria, which often has an irrational and detrimental effect.

Although most people use mental accounting, they may not realize how illogical this line of thinking really is. For example, people often have a special “money jar” or fund set aside for a vacation, while still carrying around substantial credit card debt.

In this example, money in the special fund is being treated differently from the money that the same person is using to pay down his or her debt, despite the fact that diverting funds from debt repayment increases interest payments and reduces the person’s net worth. Simply put, it’s illogical (and detrimental) to have savings in a jar earning little to no interest while carrying credit-card debt accruing 20% annually. But it’s my vacation money, you say!

The logic seems simple enough, so why do so many people behave this way? The answer lies with the personal value that people place on particular assets, and before you think this post is free financial advice, I’m going to tell you how it relates to fantasy baseball directly.

Your Assets

Your fantasy baseball roster is a collection of assets. These players aren’t your friends. You aren’t saving money to travel on vacation together. As assets, to receive the most benefit toward your fantasy baseball roster you need to maximize their (fantasy point) earning potential.

Yet, almost all of us perform mental accounting with our fantasy baseball players, myself included. We have one jar for our favorite players and another jar for the rest. Even though those marked favorite might not be bringing the most return, we balk at benching them, trading them, or cutting them for a waiver player that will give us a better return.

This is no more clear than in league hosts (like ESPN) that offer some sort of trading block feature. Players can be listed as “On the Block” or “Untouchable”, and owners assign these designations rarely on their own team needs, but more often because certain players are their “favorite.” Should any player be in the untouchable jar if you are looking to maximize your assets? Of course not. Yet, I’ve seen owners turn down can’t-refuse, fantastic offers that would greatly help their team.

Assets are also no good on the bench. If you have hitters that are just leaving stats on the bench, you need to get them into your lineup. Don’t fall into the mental accounting mistake of creating a “depth” jar. Maximize your roster potential by being willing to package players and move them for a player that you can play regularly or significantly upgrade a position. Is your starting pitching bad, but you have two hitters accumulating no value on the bench, as they masquerade as depth?  Make the move to improve your team.

Avoiding Mental Accounting

Always remember that players are fungible. I want to be careful with this because I know how important it is to roster players that you enjoy rooting for. If it’s more fun for you to finish toward the back of the pck while rostering your home-town favorites, that’s perfectly fine. Fantasy baseball is supposed to be fun. But unless a fantasy owner shakes off the temptation to perform mental accounting, and instead treats every player as a fungible asset, they will have difficulty finishing near the top of the pack.

Just as stashing money in a low interest savings account is fruitless if you have outstanding high-interest debt, it is fruitless to have a roster full of players that aren’t helping you win. While having a savings account is important, sometimes it makes more sense to forgo savings for a while (roster depth) in order to pay off debt (landing that player you can plug in right away and will help you accumulate the stats you need most).

So no more “untouchable” players, stashed in a savings jar.