I've been drawn to a couple of quotes from this field as the FA tsunami is about to take place:
Economists studying the the bidding of offshore oil leases in 1970s thought winners bid too high.
They coined the term ‘winner’s curse’ to describe this outcome: when bidders have imperfect information, all make errors in estimating the ‘true’ value, and so the highest bidder will necessarily be offering too much.
What better illustrator of 'imperfect info' than this derby about to take place. All the measurables and yet uncertainty about true value persists.
Keynes's described investing as 'a beauty contest in which judges have to decide who the other judges will find most beautiful.'
Free Agency is the Ultimate Beauty Contest and right row Nnamdi Asomugha is the most attractive contestant. Game Theory tells us that in order to make a successful choice we must anticipate the choices of others. Sometimes that means talking to the brunette in the bar instead of the blonde.
'Market prices almost always tell you something useful."
"In 1942 a grateful and very anxious citizenry rewarded its soldiers, sailors, and airmen with a substantial increase in pay. . . . in prompt response to this advance in wage income, the prostitutes raised the prices of their services. This was at a time when, if anything, increased volume was causing a reduction in their average unit costs."
John Kenneth Galbraith, “The Affluent Society”
What better illustrator of market forces than the world's oldest profession? And its relevance here - don't get screwed in a rising tide.
Further complicating the equation is DAL limited resources - available cap space vs. about a dozen clubs that must spend to get to the cap floor. The reality is what I will now call the RWilly Conundrum almost single-handedly has us constrained - don't really want him, but can't afford to dump him.
The Winner's Curse, Game Theory and Market Forces will require some pretty astute maneuvers not just to fill holes (Safety, DL), but prevent resource loss (Doug Free, DL) that exacerbates the problem. In a highly dynamic, competitive market with limited time to bid, negotiate and conclude we are at what must be described as a competitive disadvantage. All it takes is 1other bidder that wants a single resource more than DAL. I understand while our history in this market has produced successes, but its relevance in this unprecedented circumstance may negate that to a large degree