I am a DFS content consumer. I read several articles and listen to several podcasts each week. I do this for different reasons – a lot of it is for entertainment, as DFS is something I spend a substantial amount of time thinking about and I love listening to other people’s takes. I think the greatest thing that I get out of a piece of content is having it force me into a thought I may not have had otherwise. I had that happen to me last week.
I believe it was Monday when Bales tweeted out an article about Sunk Cost Fallacy. I strongly suggest reading it as it is relevant to several things including DFS.
I find any article that dives into decision making to be incredibly fascinating. Our decision making is so easily swayed by past decisions, past investment, what we hear, etc. That article spoke to me most about the way we allow past monetary investments to sway our financial decision making in the future, while also giving several examples of other ways the “sunk cost fallacy” applies.
This is one of many examples from that article.
‘I must consume, because I have purchased’ is a common way of people falling to victim to the sunk cost fallacy. Watch someone at a restaurant attempt to eat all their food even though they are already full. Even people who are on a diet often allow this bias to control their actions: “I need to finish my plate”. They even attempt to justify it with illogical statements like, “there’s people starving”, as if that’s related to their decision. Well, then how does eating it help them? A more logical question would be how to get the food you won’t finish to the starving people if that’s a real concern of yours, otherwise you’re just making illogical statements while getting fat.
With that example in mind, take a look at a piece of the article Artistotle, Confidence, and DFS from Bryan Mears. I read this on Thursday.
I’m definitely more of a tournament player and as such talk a lot about that side, but this logic can be followed in cash games too. In a contest like a 50/50, you want to be as safe as possible. Sometimes this means leaving salary on the table – you don’t want to take a player that is $300 more just to zero out your lineup if it means less safety. You can call leaving salary on the table being “risky” in cash games, but I think that merely moving up solely for the sake of it is that dreaded middle zone – we’re paralyzed between safety and risk and end up taking the suboptimal play as a result of trying to please both sides.
“I must consume, because I have purchased” could very easily be replaced with “I must spend, because it is available to me.” On the heels of reading Billy Murphy’s article, I found Bryan’s to be especially useful. I thought they spoke to the same flaws that most of us have in our decision-making process. The same way we might tell ourselves, “the diet starts tomorrow, so you better eat that last slice of pizza because it won`t be available to you after tonight” is the same way we could say, “there is $300 left for this roster, so I better spend it because it won’t do me any good just sitting there.” Just because our favorite DFS site gives us a certain salary cap to spend does not mean that we have to spend it.
This is something to keep in mind as we move into this two-game NFL slate and small slates in general. I wouldn’t recommend leaving too much of your salary on the table on a full slate, but with the inevitable lineup overlap I wouldn’t concern myself much with how much money I have left at the end of making my roster.
Another example that tied into the article on the “sunk cost fallacy” came to me today as I was driving back to my office. I was listening to a podcast where someone mentioned that he had been chasing the Doug Baldwin regression. I have been doing the same thing. I still remember being at the DraftKings FFWC and watching him score while listening as a third of the room erupted into cheers. I thought to myself, “the regression is coming, you made the right play.” The thought was a little more colorful than that, but it was along those same lines.
Thinking about that now, I am not sure if I did make the right play. I do not like to chase points. When Doug Baldwin began his epic tear through the last few weeks of the NFL season, I began my steady dose of fading him. I thought to myself, “he has to regress, right?” I still think that the strategy of not chasing points is a good one, when used correctly. I began to allow my employment of that strategy to hurt me, and I think it was in part due to the sunk cost fallacy.
I did not have any financial investment in Doug Baldwin. I hadn’t invested a lot of time into whether to play him or not. What was my sunk cost? In a way, I think it was my dedication to getting the edge that I thought would come on the day that Doug Baldwin finally regressed.
We can typically expect inflated ownership on a player that has a huge game, and we saw that with Baldwin as he began his fantasy point frenzy. The thought behind not playing him is allowing the public to chase those points and gain an edge on those lineups when he does regress back to his median or average fantasy production.
Of course Doug Baldwin did not regress for weeks. The mistake I think that I made was that I refused to consider him as a play because I had already invested so many weeks into waiting for his regression. Instead of chasing points I began chasing regression.
My “sunk cost” was my previous weeks dedicated to fading Doug Baldwin, and I allowed that sway my decision making going forward.
