Decision-making involves lots of complex thought, much of which occurs sub-consciously. These sub-conscious strategies for making sense of information are called “heuristics,” and often help us to make quick, good choices. In some contexts, however, they lead us astray. But by understanding our own minds, we can dodge these sub-conscious traps, and even turn them against our league mates. This article highlights one such exploitable flaw in the way we estimate value.
The Less is More Phenomenon
At a booth on the floor of a sports card convention, two sets of Topps baseball cards are up for auction. One set—we’ll call it Set A—contains 10 cards professionally graded as mint condition, with a book value of $15. Set B features the exact same cards as Set A, but also contains several cards graded as poor condition. Despite their lousy condition these low-quality items still hold a positive market value, and make the official book value of Set B $18.
When traders bid on the two sets, an interesting pattern emerges. Despite Set A being worth less than Set B ($15 compared to $18), people are willing to pay more for it than they are for Set B—by approximately 30%!* The presence of cards in poor condition diminished Set B’s perceived value even though the low quality items give Set B an officially higher book value. In fact, both casual traders and experienced card dealers consistently placed a lower value on the set with cards in lousy condition.
The same phenomenon has been observed in other contexts as well. For example, shoppers judged sets of fine china with damaged items to be worth less than similar sets with fewer good-condition pieces.** Classic economics (and common sense) tells us that adding an asset to a set should increase that set’s overall value, but the phenomenon is clear: people assign lower value to packages with low quality items.
Why? Because when estimating value, people do not add. They average. The trader examining the beat-up Topps card doesn’t simply add its value to the other cards in the set. Instead, they take an average and land somewhere in between the high and low value cards.
The Strategy: Taking the Battered Cards
To take advantage of the less is more phenomenon in fantasy football, send trade offers for good players and bad players. Including a bad player on your trading partner's side of the deal will cue them to sub-consciously average instead of add the value they’re giving away. This drops the asking price of the good player you actually want!
The key is to find a player on your opponent’s roster that acts like the baseball cards in poor condition, or the broken china. In both those cases, the item is not what it should be in the eyes of the person assessing its value. The beat-up card is not displayable, and the chipped teacup is inelegant.
The analog to fantasy football is simple—you’re looking for a bust. A player that has failed to live up to expectations and looks more like waiver wire fodder than a draft day steal. Throw one of these underachievers into the trade offer and let your trade partner’s brain go to work. Adding that "battered card" will make it more likely that they accept your offers.
* Hsee, C. K. (1998). Less is better: When low-value options are valued more highly than high-value options. Journal of Behavioral Decision Making, 11(2), 107–121. ** List, John, A. (2002). Preference reversals of a different kind: the "more Is less" phenomenon. American Economic Review, 92(5), 1636-1643.