The Relationship Between Ownership and Production
The daily fantasy market is still inefficient, especially in GPPs, but that doesn’t mean the crowd can’t locate the best plays. Consider these two scenarios:
Scenario 1: Peyton Manning (35%), Tom Brady (25%), Drew Brees (15%)
Scenario 2: Peyton Manning (15%), Tom Brady (13%), Drew Brees (12%)
In both cases, we have Manning, Brady, and Brees as the three highest-owned quarterbacks in tournaments. In that way, the crowd might be “right” in that the most valuable players (in terms of dollars per point) are in the most lineups.
But these are two fundamentally different situations when we talk about usable value, with Manning and his 35 percent ownership in the first scenario offering far less usable tournament value than his 15 percent ownership in the second. Same player, same price, fundamentally different amount of actual tournament value based on projected ownership.
For the most part, I still think daily fantasy sports players play too much chalk in GPP’s, i.e. closer to the first scenario. That means that, as a group, we’re good at finding dollar per point value—which fits with the wisdom of the crowd theory—but poor at identifying usable tournament value. With the first type of value, biases get “factored out” such that player rankings become quite sharp. With the second, those biases don’t, and thus ownership often doesn’t reflect the relative probabilities of success.
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