Friday, September 11, 2015

Overreaction Bias in Fantasy Football

As we enjoy the week of football I suggest you review this abstract and paper if you can find it.



Does the Stock Market Overreact? WERNER F. M. De BONDT and RICHARD THALER*

 ABSTRACT Research in experimental psychology suggests that, in violation of Bayes' rule, most people tend to "overreact" to unexpected and dramatic news events. This study of market efficiency investigates whether such behavior affects stock prices. The empirical evidence, based on CRSP monthly return data, is consistent with the overreaction hypothesis. Substantial weak form market inefficiencies are discovered. The results also shed new light on the January returns earned by prior "winners" and "losers." Portfolios of losers experience exceptionally large January returns as late as five years after portfolio formation.


We as fantasy football player are like the market investors discussed in this article. We buy and sell our FF players like stocks. Thus we will overreact! Even if you know it,  you will have the emotions to pick up a player or drop them based on a dramatic game performance good or bad.

Week 1 is tough because what we thought we knew when we drafted may not be so true.

For instances we think we know the role of a player.  Abdullah vs Bell in Detroit. In the draft, Adullah was going higher than Bell. That was because we guess he would take over.  He might, so if the first game this week is not solid then folks will be nervous and might drop or sell in a trade too low.

So I urge you to take a quick tour and try to spot these overreactions before they happen!


So let me throw in our FSP rankings for RBs and the DIFFs in the rankings.

Overreaction Bias Prediction and Our Action Plan!

Step 1. Locate all RBs within Teams that are not very different in rankings.

Step 2. You predict the game flow, use vegas over-under points, weather, etc to think about the situations where there are 2 RBs or more in a team that are close.

Step 2A. Focus on 1 and 2 RBs. Locate these


Step 2B Focus on 2 and 3 RBs


STEP 3 Given all your information. Answer this question? What teams/players (within the 2 groups) will have unexpected dramatic good/bad outcomes!

Action Plan

Step 4 If you are successful at predicting then who and are the players available to acquire before the            Sunday Games?  IE. We have in BUF Dixon and Williams close as 2/3. IF you think either on            separates from the other then value is there.  If Dixon scores a TD vs Williams who does not                and only gets 30 yds? You can predicted Dixon's value goes up! Or the other way around.

Step 4A      Acquire Williams or Dixon off WW.

Step 4B.    Trade a bench "dud" for either one if you are confident.

Step 5       Record Keep - See blog post on record keeping for next season, to "see" if you have a                           talent for this virtual waver wire pickup!

Step 6    Repeat step 4 with another team's RBs.

Note the NE situation we had DL first in the group. Post before the game yesterday! So you have predicted overreactions Bolden and White Bad! Lewis Good. So expect overpaying and underpaying for these guys!.

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