The sunk cost fallacy is the belief that you continue to pour in additional resources (usually time and money) on an investment or activity (even if it’s failing or has already failed) as otherwise, the resources you already spent on it would just go to waste.

This is a common occurrence in fantasy football, particularly in dynasty leagues.

Manager A spent a first round rookie pick on a player and that player has failed to deliver. Two years later Manager B offers Manager A third round pick and Manager A is disgusted by the offer. A declined trade with a message attached saying, “Why would I trade player X that I drafted in the first round for a third round pick?”

It’s a tale as old as time. Sunk cost fallacy applies to many situations in our lives. Jobs, vehicles, stock investments, and fantasy players.

The thing to recognize is that holding on to this fallacy will often continue to cost you. The wisest thing is to understand that a sunk cost is exactly that. It is a price that you have already paid. The price paid in the past is not a controller of future value. It is a failure of logic to believe otherwise.

Believing the price paid controls the current price means it would need to go both ways. If the current price cannot be lowered because of what was paid in the past than the current price cannot be increased because what was paid in the past.

Referring back to Supply and Demand, draft capital does not control current value. Values of players are dynamic and influenced by many things.

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Clyde Edwards-Helaire is a perfect example of a player that managers are sucked into the sunk cost fallacy. Helaire was a first round rookie pick in supplemental rookie drafts and a third to sixth round pick in startup drafts depending on format of the league. He often was drafted ahead of Jonathan Taylor.

Holding onto Clyde at this point expecting a manager to trade you a first round rookie pick is illogical. Expecting the manager who has Taylor on their roster to trade him for Helaire is laughable at best.

Continuing to hold Helaire is not going to change his situation. It is irrational to factor in what was spent to acquire Helaire. The only things that should influence the decision on what to do with Helaire are the current alternatives. If a third round pick is being offered the consideration should be whether you currently believe Helaire is worth a third round pick or not.

What drives people to get trapped by the sunk cost fallacy is commitment bias. Commitment bias is peoples’ tendency to remain committed to past decision even if the outcome will be undesirable. The commitment escalates over time and people become focused on past costs and not future costs and benefits.

The future cost of holding Helaire is the use of a roster spot and possible continued decline in value. People are loss averse, we feel the impact of a loss far more than we do a gain. The continued holding creates an even higher sunk cost and necessary return.

The best way to prevent this is to separate the situation into phases. The acquisition phase where a player was acquired based on available information at the time. The holding phase where a player’s value has declined based on their performance or situation (injury, suspension, etc). The decision phase is where we are now with the understanding that the value of the player is currently X. By separating we are able to look at the current phase without coloring a player’s value based on sunk cost.

A manager in one of my leagues currently is rostering Darnell Mooney. He traded a first round rookie pick before the start of the 2021 season for Mooney. The manager was recently offered a second and third round rookie pick for Darnell. He rejected the offer with the response that it would only be sunk cost fallacy if Mooney’s value wasn’t going to return to a first round rookie pick.

Looking at this in the lens of the different phases we can remove the emotion that Mooney’s manager has. In the acquisition phase Darnell had just finished his second season in the league and had a 1,000 yard receiving season where he was targeted 140 times. In the holding phase Darnell performed worse on a per game basis and was injured for the last five games of the season. The Bear’s also traded for Chase Claypool and DJ Moore. In the current phase Mooney is on a team with a new high priced receiver that has been one of the best in the game for the last four years, with over 1,100 yards receiving in three of the four years and averaging 133.5 targets per season in those four years. Mooney’s team also traded an early second round pick for another wide receiver. Mooney’s value has been significantly reduced from the time that the current manager traded for him.

Being logical and removing the emotions attached to your decisions can be very hard. Emotions are a big part of what drives us to play fantasy football. The thrill of winning, the happiness when making a trade, even the pain of a defeat. When making decisions on how to a manage a roster manager’s should do their best to remove emotion and focus on logical analysis of the current situation.

Recognizing when you are falling into the sunk cost fallacy will help you to step back from the situation and reevaluate it. Avoiding it altogether will allow you to get the most value out of a bad decision made in the past. The value that can be created by making the tough decisions early before incurring any more costs can be the difference between winning a championship and being mired in mediocrity.

Additional Information

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