For those unaware, fantasy football (FF) participants draft real NFL players to form virtual teams, scoring points based on the athletes real world performances. Managing your team is all about decision making for your players, such as trading, or deciding who to start. Those decisions are shaped by behavioral tendencies that can be explained with economic theory. Fantasy football is more than just a game of statistics, it’s a weekly experiment in the science behind decision making.

The first step to becoming a more objective fantasy manager is to acknowledge that you make biased decisions, such as trading players. A trade will make or break your season, which is why it’s so important to understand Loss Aversion. This explains how people tend to overly fear what they stand to lose compared to what they stand to gain. An example can be found in stock market trading, where individuals are often excessively reluctant to buy stocks where they risk losing money, despite a potentially higher reward. In FF, managers fear giving up a player that could suddenly become elite. They focus on this experience more intensely than what they could gain.

According to macro economic theory, these gains are being underappreciated. Managers have varying needs for supply of player depth across different positions. According to Comparative Advantage, trade is more efficient when individuals specialize in the good with the lower opportunity cost, which is the good in which they give up the least to produce. For us, this means that managers benefit from offering the player that is least needed in regards to player depth, in return for a player that is. Trading should always result in a win-win.

While we now recognize the importance of trading, it’s crucial we also recognize that it comes with its own set of behavioral biases. When valuing players for trades, it’s easy to fall victim to the Anchoring Bias, the tendency to rely too heavily on the initial piece of information.
We see this in the real world when a discounted price convinces us a purchase is worthwhile, regardless of the item’s true value. In FF, many managers put too much emphasis on a player's draft position when valuing them. Instead, managers should always be open to new information, even if it contradicts their initial belief.

Recognizing these economic tendencies won’t just make you a more successful manager, it will give you a new appreciation for understanding the subtle biases that shape our everyday decision making.






Work Cited:


Dan Pilat and Dr. Sekoul Krastev “Why do we buy insurance? Loss-aversion, explained.” https://thedecisionlab.com/biases/loss-aversion

Hayes, Adam “What Is Comparative Advantage?” Investopedia https://www.investopedia.com/terms/c/comparativeadvantage.asp

Dan Pilat and Dr. Sekoul Krastev “Why do we compare everything to the first piece of information we received? Anchoring Bias explained.” The Decision Lab https://thedecisionlab.com/biases/anchoring-bias