Sunk Costs are Sunk
One of the posters brought up Manny Ramirez last year, and it definitely deserves a post of its own. The phrase "sunk costs are sunk" is a catch-phrase of economics. Borrowing an example from freakonomics (albeit paraphrased and slightly amended)...
Say, you've purchased movie tickets ahead of time to a theater downtown. However, the night of the movie you are worn out and there's a Seinfeld marathon all night. Now, many would feel obligated to attend the theater, having already spent the recusant dough. The economist would argue that the greatest satisfaction at that point is independent of the cost of the movie tickets, since such costs are "sunk."
Now, let's say you drafted Manny Ramirez in the second round of last year's draft, and he's failing (flailing?) miserably at the plate. Do you bench him, drop him, trade him, or just start him every night with blind faith in the Red Sox. Well, unless you are from Boston, we can count that last one out. Regardless of how much you invested in the player, such investment is a sunk cost, and like an MLB team not named the Dodgers you should play the outfielder who will help you the most.
Now, what about the other options? I would recommend not dropping him by the following logic. While the cost of you using a roster spot is tangible, it is lower than the risk of someone else picking him up and the player returning to form. Last year alone I picked up Alex Rios and Paul Konerko, and should have won the league.
Finally, to the question of trading him. If it is early in the year, and he still has value for being drafted in the so-and-so round, do it. If you are getting what you put into him, and there's a risk he will be a bust, trades like that should help you over the course of a season. If it is late, and the player doesn't look like they will perform, trade them for above-marginal value. Otherwise, you might as well have dropped them, an action which will hurt you.
Say, you've purchased movie tickets ahead of time to a theater downtown. However, the night of the movie you are worn out and there's a Seinfeld marathon all night. Now, many would feel obligated to attend the theater, having already spent the recusant dough. The economist would argue that the greatest satisfaction at that point is independent of the cost of the movie tickets, since such costs are "sunk."
Now, let's say you drafted Manny Ramirez in the second round of last year's draft, and he's failing (flailing?) miserably at the plate. Do you bench him, drop him, trade him, or just start him every night with blind faith in the Red Sox. Well, unless you are from Boston, we can count that last one out. Regardless of how much you invested in the player, such investment is a sunk cost, and like an MLB team not named the Dodgers you should play the outfielder who will help you the most.
Now, what about the other options? I would recommend not dropping him by the following logic. While the cost of you using a roster spot is tangible, it is lower than the risk of someone else picking him up and the player returning to form. Last year alone I picked up Alex Rios and Paul Konerko, and should have won the league.
Finally, to the question of trading him. If it is early in the year, and he still has value for being drafted in the so-and-so round, do it. If you are getting what you put into him, and there's a risk he will be a bust, trades like that should help you over the course of a season. If it is late, and the player doesn't look like they will perform, trade them for above-marginal value. Otherwise, you might as well have dropped them, an action which will hurt you.
Labels: Economic Editorials
posted by Zachary Piso at
11:38 AM
2 Comments:
If we're talking about slumping players and whether or not to trade/sit/release them, I have some interesting points that may be valuable. A good way to determine if a player is going to get out of their slump is by simply looking at the teams upcoming schedule. Certain players excell against certain teams/pitchers. The "Sunk Costs are Sunk" post made reference to Manny Ramirez. Being a native Clevelander, yes, I know it sucks, we always knew Manny was going to perform well against us because the Indians were his former team. Granted, he didn't leave on bad terms, actually, he left on his own terms (Manny doing something on his own terms? yes, I know, it's unheard of) Regardless, he still wants to prove that we made the mistake of not paying him what he thought he was worth. Thus, he loves punishing us for not resigning him to the enormous deal he coveted. Players feed off anything that can motivate them to be better and contract situations, trades and rival teams are some of the best examples.
Also, certain hitters excell against certain pitchers. A brief glimpse at who your hitter will face next can give you valuable insight into whether or not you should sit them. The strategy is figuring out which pitchers your hitters hit best against. Investigating the pitcher's delivery to the plate and who's catching can also give you insight in regards to your base stealers. A pitcher with a slow, "herky-jerky" deliver is more likely to be stolen upon than a pitcher with a fast delivery. The pitches a pitcher throws also lets you know if your base stealers will have a higher success rate. The best example I can think of is the most notorious knuckle-ball pitcher in the game today, Tim Wakefield. Wakefield throws the knuckle-ball no faster than 60-65 MPH. Even an extra 1/2 second gives your base stealer a significant advantage.
I think that this is a very interesting point. I've never considered "betting" on when a player will come out of a slump, but rather if they will. Over the course of the season I will have to observe some struggling players and try to figure guess which pitcher they will break out to.
The logic is particular interesting when you consider players whose mechanics are okay, but their psychology is off. I imagine such guys can psych themselves out of the slump.
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