What is Tradezilla?
by Clay Dreslough, Baseball Mogul Lead Designer
Tradezilla is the name we came up with for the new General Manager artificial intelligence (AI) in Baseball Mogul 2007. While previous versions were pretty good at evaluating trade offers, they still fell short of the intelligence exhibited by the human team owners in Baseball Mogul Online.
As you will see in this article, we tackled this problem using "artificial life": a combination of Darwin's "survival of the fittest" with brute-force computing power. When I thought of "brute-force" and "life", I thought of Godzilla -- so I coined the term Tradezilla for the project.
Player Salary
The core of the General Manager AI is Baseball Mogul's Player Evaluator. Drawing on the research done by Bill James and other sabermetricians, we built algorithms that converted baseball statistics into "wins" for his team.
As an example, according to Bill James' Win Shares methodology, we know that Barry Bonds was worth 18 wins to his team in 2001 (this is the highest value for that year).
The next step to assessing a player's value is to compare him to a "replacement player". A replacement player is an idealized construct that represents any of the various players on the cusp between the minor leagues and a major league roster. These players earn anywhere from about $15,000 per year (a salary in the low minors) to $327,000 (the major league minimum salary in 2006). Although $327,000 is a lot of money, it isn't much compared to the $25,200,000 that Alex Rodriguez is earning.
If Barry Bonds gets injured, you will replace him with the best player you have in the minors. It's the difference between Barry Bonds' performance and that of his replacemement that decides his value.
While the "best minor league player" might vary between teams, it is still a useful concept. If you filled a 25-man roster with "replacement players", you might win about 50 games. So each player would be worth about 2 wins. Barry Bonds was worth 18 wins in 2001 -- so we can also say that he was worth 16 wins "above replacement".
These are the wins that have value -- the wins that we are willing to pay big money to get from a player like Bonds. If you have a team filled with borderline major leaguers, you might win 50 games. To make the playoffs, you probably need to win about 95 games. It's these extra 45 wins that general managers are trying to find every year.
For the purpose of salary, we found that it doesn't matter much where the wins come from. You can pay Alex Rodriguez $25,200,000 to give you 12 extra wins. Or you can pay six separate players $4,200,000 to each give you 2 extra wins. Either way, you're getting 12 more wins than you would without that level of talent.
Player Trade Value
Baseball Mogul's Player Evaluator has undergone many changes over the years. But it is still essentially the process described above. Using the best ideas we can steal from the field of sabermetrics, we assess a player's value in team wins and adjust for the total payroll available to the league.
However, building a General Manager within this framework requires some clever thinking. Evaluating a player's "trade value" is very different from calculating what salary he is worth. This is because the rights to a player also include the burden of that player's salary over the duration of his contract.
Calculating Net Trade Value (First Attempt)
To decide how much a player his worth in a trade, we start with the Player Evaluator and then subtract how much we are paying him (since we could spend this money on other players). If we use the exact same algorithm to evaluate players that we used to determine how much to pay them, we will find that any player that reaches free agency has exactly zero trade value.
For example, if David Ortiz goes on the free agent market and we calculate that he is worth $15,000,000 per year, then one of the computer-controlled GMs will sign him at that salary. But what is Big Papi's trade value if he is already earning $15,000,000 per year? There's no easy answer. If we use the same algorithm we used to decide his salary, then his trade value is exactly zero. This is because his gross value to the team is $15,000,000 per season. Minus the $15,000,000 that we are paying him. And this leaves us with the notion that Ortiz has zero value to the club.
But in real life, this idea doesn't make sense. There are some players like Alex Rodriguez and Mike Lowell that reached a point in their contract where the team felt the player was worth less than what they were being paid. When Texas Rangers owner Tom Hicks woke up and realized that he was paying $25 million per year for A-Rod, and his team was still mired in last place, he knew he was spending too much on one player. Thus he was willing to unload A-Rod to the Yankees and absorb some of his remaining salary. At that point in time, A-Rod, despite being perhaps the most valuable player in the league, actually had negative value as a tradeable commodity, if you factor in his huge contract.
Next page: Redefining Trade Value
Footnotes
Although we use some different algorithms for assessing "replacement level", the logic above is essentially the same.
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