There was an interesting debate on the Fantasy 411 show on mlb.com. The discussion was about a proposed fantasy trade in a 12 team mixed league of J.J. Hardy and Carlos Guillen; clearly a “sell high” trade. One of the hosts discussed the trade as follows, and I am summarizing: most times you will break even on the trade, but if Hardy is for real then sometimes you will gain a lot, so you should do the trade.

For anyone who knows game theory, this is called a “dominant” strategy. A strategy is said to be “dominant” if it does at least as good as another strategy, but sometimes does better. So by pursuing the dominant strategy you never do worse and sometimes better. This is a fundamental principle of decision making; you will never be in a worse position and sometimes will be in a better position.

A principle such as this has great power in fantasy baseball (and in many other aspects of life also). The conventional wisdom is generally to buy low and sell high, and with good reason. But this can be wrong, and the Hardy/Guillen example is a good one. Conventional wisdom says that Hardy will decline; and based on preseason projections, lets assume that Hardy was projected for something like 20HR and 70RBI. Then in this scenario you have already gotten the most you will get and will only have a relatively meager balance remaining on his projection; so sell. Guillen on the other hand may have a similar projection and only has 4HR, so you have a higher balance remaining so buy. Simple, right???

However, at some point you have to accept the possibility that Hardy will keep it up. So in this scenario, Hardy may end up with 30 HR and 100RBI. In this case it would be foolish to trade Hardy, despite the conventional wisdom. So how do you know??

You apply the dominant strategy criteria. Lets assume for the sake of discussion that Hardy’s improvment is real some percentage of the time, lets say 25%. So in those 25% of circumstances you gain tremendously; in the rest of them you roughly break even or lose very slightly.

The Fantasy General must be astute at making these estimations. But it is hard in this particular scenario to justify not making the trade when the upside is great and the risk is low. Most times you break even, sometimes you gain a lot, and if that “sometimes” is even a quarter of the time or more then pull the trigger.