A Standard Framework for Trade Negotiations
by Brad Johnson December 19, 2018
(This is not my work but fear it may someday not be found at the link below)
Originally published here: https://fantasy.fangraphs.com/a-standard-framework-for-trade-negotiations/
Yesterday, I spent a decent chunk of my afternoon arguing with another writer on Twitter about trade etiquette. A part of me wonders why I engage in these online debates. In some ways, it’s very natural. As a teenager, arguing in an online baseball forum is how I developed the writing skills I need for my trade. Arguing online is almost a compulsion reinforced over half my life.
In other ways, have you ever stopped to wonder how weird it is to use the incredibly advanced technology of the internet to seek out and engage in an argument with a stranger? So weird, right? I don’t go around eavesdropping on people in Target, waiting for a hot take with which I disagree. Although… that sounds like a fun YouTube series.
Anyway, I digress. Today we’re going to discuss my standard process for engaging in trade negotiations. I find this is the easiest way for everybody to get what they want in a minimal amount of time. Some of you may disagree. That’s fine. I don’t understand it, but that’s fine.
Through necessity I’ve learned it’s best to slice through the layers of bullshit that usually accompany the start of a trade negotiation. First, a couple assumptions.
Your trade partner is of roughly equivalent talent – if you’re sharking a pool of minnows, then the following might not be ideal. You can say no to a bad offer. So can your trade partner. Honestly, a full 125 percent of the counterargument to my process revolves around people accepting bad trades. Ok, enough stage setting, here’s what I do.
Step 1: Identify Who I Like
Never admit to how much you want something. That’s negotiating 101, right? The problem with this line of thinking is that it violates assumption #1 above. If your trade partner knows what they’re doing and how to value assets, then you gain almost no advantage from playing your cards close to the vest. Rather than spending hours dancing around the truth, open with what you want.
This is not to say you can’t boil in some tricks. In my experience, popular mid-tier players can become overpriced when you show too much interest in them – Tyler White for example. When I want a merely decent player I might begin an offer by asking for Joey Votto. Oh yea and just throw in White too. Maybe we get somewhere on Votto. More likely we “settle” for a modest swap involving White.
Being honest about your wants does not mean you cannot be devious.
Step 2: Ask Who They Like
This is where people get offended. Some owners simply won’t do this, claiming they’re giving away some phantom leverage or doing all the work for you. Here’s why it behooves everybody to simply admit to who they like.
Needful trades aren’t actually very common. For example, how many times have you actually traded a spare second baseman because you didn’t have a third baseman? I’m going to make up a number and say these comprise maybe 15 percent of all fantasy trades. The remaining 85 percent of trades fall into two similar categories: future for present value or pure arbitrage* attempts.
*Arbitrage refers to the process of creating value where none exists. For example, I might try to swap a $6 asset for a $7 asset.
Put another way, my goal in most trades is to acquire players from your roster that I like more than the ones I’m giving up. Since there’s considerable wiggle room in player evaluation, it’s ok if everybody admits this is happening. We can both walk away from a deal thinking we fleeced the other owner.
Once you’ve each supplied a list of who you like, it’s time to look for overlap.
Step 3: Accept Good Offers Or Decline Bad Offers
The folks who don’t like to engage in Step 2 usually point to this stage as an excuse for their intransigence. Let’s say I gave you a list that includes Jose Ramirez. You countered with a list that happened to include Brad Keller, Colin McHugh, and Diego Castillo. I might say to myself “let’s see how much they like Keller, McHugh, and Castillo!” So I offer the trio for Ramirez. And you say no.
See how easy that was? I made a terrible offer, and you said no.
At the core of the deal, I’m still trying to buy Ramirez for as little as possible. You either spam no until I reach an acceptable offer or you can proactively counter my offers. Either way, it’s better for us to start with knowing who we each like before engaging in this stage.
The alternative is to enter the negotiation blind. I know I want Ramirez. I have no idea who you like. Let’s say I have Brendan Rodgers. You may believe he accounts for anywhere between zero and 60 percent of Ramirez’s value. It just depends on how you feel about Rodgers. If you don’t like him at all but never tell me, then I’ll likely keep adding him to offers as 50 to 60 percent of Ramirez. I’ll also continue to make offers with other players in whom you’re not interested too.
Think of it another way, trading is like trying to solve a combination lock by brute force. We’re just guessing different combinations until the lock opens. By exchanging lists, we can dispense with countless useless combinations. To continue the analogy, exchanging target lists is like trying to solve a combination lock by brute force while knowing the first number and one of five options for the third number. It’s still an uphill battle, but it’s a greatly simplified process.