100 Fantasy Football Tips in 100 Days, Day 11: Detecting Randomness
As I mentioned earlier this week, I’m reading Nassim Nicholas Talleb’s book Fooled by Randomness. I’ve read a number of passages that are extremely applicable to fantasy football and the NFL, including this one on randomness:
Memory in humans is a large machine to make inductive inferences. Think of memories: What is easier to remember, a collection of random facts glued together, or a story, something that offers a series of logical links? Causality is easier to commit to memory. Our brain would have less work to do in order to retain the information. The size is smaller. What is induction exactly? Induction is going from plenty of particulars to the general. It is very handy, as the general takes much less room in one’s memory than a collection of particulars. The effect of such compression is the reduction in the degree of detected randomness.
It’s been fairly well-established in various disciplines that humans really suck at detecting randomness. We typically expect sequences to alter more than they do, so when a pattern emerges, we assign it a cause. Normally it’s just noise.
As I read this passage, I wrote down a note on NFL injuries. Even though we detect patterns in injury data, we have to realize that we’re susceptible to being fooled by randomness. A lot of what we perceive as injury proneness is just an illusion.
Fantasy football owners can garner value by taking advantage of the human tendency to perceive patterns and assign causal relationships that don’t exist. In my book Fantasy Football for Smart People: How to Cash in on the Future of the Game, I propose a very contrarian weekly fantasy strategy dominated by exposing yourself to “down” players. Chances are when a stud running back has two poor performances in a row, there’s more randomness there than it seems. As a result, his perceived stock will presumably drop too far, subsequently allowing you to generate value from the inevitable mean regression of all those random factors.