(*) MASTER NOTES: Opportunity costs

When I was in university, one of the core concepts I learned about in ECON 100 was “opportunity cost.” (Another key concept was, “Don’t sign up for an 8 AM ECON100 lecture when your job is working midnight to six as a disc jockey.” But I digress.)

In the real world, opportunity cost is using trade to optimize production levels. If I’m better at producing machine tools and you’re better at producing smartphones, it makes sense for each of us to specialize in what we’re good at, so we can max our production, and then swap our resulting surpluses.

Opportunity cost can also be a guide to making our fantasy moves. Obviously, we can trade our surpluses in, say, stolen bases to a guy with a shortage of SBs, and get back his surplus in, say, saves.

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But there’s also opportunity cost in purely internal moves. Here’s an example from a move I made in The Great Fantasy Baseball Invitational (TGFBI). I made two bids, losing by a mile trying to sneak Vince Velasquez through on a lowball, but I won PIT SS Cole Tucker with a $188 bid ($96 higher than necessary—bring back Vickrey!).

Tucker had been called up on Saturday, after PIT’s starting SS Erik González was hurt Friday night, in a collision with OF Starling Marte. Gonzalez broke his clavicle and went straight to the 60-day IL. He’ll be out for at least two months. This might actually cause some relief in the PIT locker room, as Gonzalez “has been involved in a handful of collisions in the field this season,” according to MLB.com reporter Adam Berry.

When I heard about Tucker’s callup, I remembered him from First Pitch Arizona, where he was mentioned by some of the scouting experts (not intended as a promo plug for FPAZ, but...). Tucker slashed .370/.442/.457 in 20 AFL games, with 6 SB and a 1.00 K/bb Eye Ratio. He made the All-AFL team.

He also feels like one of those guys managers like. He’s a switch-hitter, stronger hitting against LHP in the minors but not a black hole against righties. He plays solid defense. And he won the AFL’s Stenson Sportsmanship Award for “character... unselfishness, hard work and leadership.” Managers like guys like that. I bet he calls managers “Skip.”

Tucker checked out as a prospect, starting with the BHQ daily call-ups report. He ranked #7 in PIT’s minor-league organization (other sources ranged from #5 to #8), with an “8D” rating—a ceiling of a solid everyday starter at SS, albeit with just a 30% chance of reaching that ceiling. The callups report also said Tucker’s "floor is the next (former AAAA utility infielder) Donald Kelly; ceiling is Chipper Jones lite."

Chipper Jones lite? I’m in!

Due diligence meant scanning other sources. Baseball Prospectus had Tucker as #6 in PIT. Interestingly, Bret Sayre of BP, who is in this GFBI league with me, was not keen on Tucker, calling him “a fantasy profile built for 2011” with just OK SB potential and middling-at-best power.

Still ... Chipper Jones lite? I’m in!

Tucker should get lots of PT with Gonzalez on the shelf for two months or more. He’s hit at the top of the order in his first two games on Saturday and Sunday (then celebrated my rostering him by getting dropped to eighth on Monday).

Here’s the opportunity cost analysis. First, my opportunity costs to add Tucker:

• $185 in FAAB
• Drew Steckenrider, whom I had to cut from reserve to make the roster work
• and HR/RBI, because I had to reserve Ryan Braun (he celebrated my benching him by hitting a bomb on Monday), and Tucker is not likely to be a big power source.

My potential opportunity gains:

• Tucker’s BA should be more helpful than Braun’s current .199 and projected .260-ish.
• Tucker’s SBs, in a category I’m currently leading but with some other teams close behind
• and Runs, a category where I could easily gain 5 points, and where Tucker profiles well

The path to doing well in fantasy these days pretty much requires us to gamble on upside, and since Tucker has some and Braun doesn’t, this seemed like a move worth making.

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I also like to look at the free-agent transactions in my leagues every Monday to see what the other owners are doing.

This week in Tout Wars AL-only, the Glenn Colton-Rick Wolf partnership, defending champs, made a set of moves that showed sharp understanding of opportunity costs. First, they IL'ed their MI Eduardo Núñez, who joined 2B Rougned Odor on their IL. Then they bid $2 to pick up TOR MI-eligible journeyman Eric Sogard, and another $2 to grab up Blue Jays prospect Cavan Biggio (Tout rules allow FAABing minor-leaguers affiliated with AL teams).

There’s a path to PT at 2B in TOR. The Jays had demoted Lourdes Gurriel, with several established low-upside journeymen as replacements: Alen Hanson, Richard Ureña and Sogard. A top prospect like Biggio should be a more obvious choice for the Jays after an .880+ OPS season last year at Double-A and a near-1.100 OPS so far this season at Triple-A, but the team is holding off any promotion, pending Biggio meeting service-time thresholds. (With Vlad Jr. getting the call this week, Biggio might not be far behind.)

And here’s where the opportunity cost analysis comes in. Under Tout rules, FAAB pickups must join the active roster and remain on it for a week. So the partners had to take Biggio’s zero in the MI slot for this week. As well, to make roster requirements, they cut Terrence Gore, Cory Gearrin and Tyler Wade, whom they picked up last week to fill Odor’s spot. Odor will be back this weekend, so I’ll bet Glenn and Rick will activate Odor and either waive or reserve Sogard.

So the full opportunity cost equation works out like this:

Glenn and Rick lose:

• One week of counting stats from Wade, who plays four or five times a week, batting ninth, and has a career .468 OPS and negligible counting stats.
• Gearrin (a proto-closer play who didn’t pan out)
• Gore, a speed-only contributor who also doesn’t play much
• And four FAAB bucks.

Glenn and Rick gain:

• Sogard at MI, a slight upgrade on Wade
• and Biggio, a potential MI game-changer, on reserve.

That’s a pretty sizeable opportunity gain for a very limited opportunity cost. And that’s how champions be champions.

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