The Gains from Trades

Matthew Namee writes about the wheeling and dealings of Billy Beane and his stathead friends. Beane, J.P. Ricciardi, Theo Epstein, and now Paul DePodesta all share similar philosophies on baseball. This got me thinking, “why is it that these guys trade with each other so much?” Is it some conspiracy, coincidence, or just friends wanting to deal with friends?

Well, I think there is another option that is related to friendship. These are the few GMs in the league who value player qualities in the same way. If they value players differently (I mean from a different evaluation perspective), some trades that ought to take place will not. For example, let’s say Beane eyes a traditional “leadoff-man” speedster for defensive purposes on a team in desperate need of some relief pitching. Beane wants the guy to bat eighth and save some runs in center. Beane is willing to part with a relief pitcher with few saves but a great K/BB ratio. An upgrade for both teams. Were Beane on the other team he would make the trade in a second. The trade would make both teams better off. But, the old school GM complains that “there is no way I am going to give my leadoff-man who can steal lots of bases and manufacture runs for anything less than a dominant closer.” Of course, this is when Beane offers him a high save closer he’s built up by pitching in the 9th inning with three-run leads, and laughs. But this will only work for so long , as GMs begin to realize they are getting screwed and refuse to do business with the A’s. No such problem exists when Beane can work with GMs who evaluate talent in a similar way. These guys are bound to trade with each other because they are the only ones who can see unrealized gains from trade from the same perspective.

I went Googling on the web and here is what a I found. Beane’s explanation seems to support this.

“We have similar beliefs and knowing each other allows us to make deals [quickly]. With J.P. and Theo, I can get a deal done in five minutes.”

And Ricciardi feels similarly,

“In trades with Billy, or anybody else, we don’t mind trading away a good player, as long as we get a good player back. We never feel like it’s about pulling a fast one.”

Just as Star Wars fans can trade replica lightsabers more easily at the Bi-Mon-Sci-Fi-Con than at a flea market, Beane & Co. can swap players much easier amongst themselves. Maybe this explains why Beane let some of his “secrets” out in Moneyball. If current GMs won’t trade with him, maybe some tight-wad owners might read the book and hire him some trading partners.

BTW, I doubt this is an original idea, and it has probably been hashed out on Primer somewhere. If you know of any discussions of this, please send me links.

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