Intuition vs QuantsApril 1st, 2010 by Eric Kesselman in Theoretical
"How terrible is wisdom if it brings no profit to the wise?"
- The Devil, Angel Heart
So I've been having an interesting debate with Chris Liss of Rotowire.
Chris does a good job of framing the debate in his recent post here. It starts in the second section.
The debate is largely centered on the relative value of intuition vs quantitative analysis. Chris claims to largely be an intuitive player, having had such extensive experience (most of it extremely successful) that he relies on his instincts to quickly and accurately lead him through his decision processes. I am somewhat sympathetic to Chris' position, being largely an intuitive guy myself. My first instinct will very often be the right one. However, its important to check your intuition frequently, otherwise you'll never know if you start drifting and become very vulnerable to some group think problems. You also might become overly reliant on strategies that work against a particular group of opponents.
I've largely been arguing Bill's side. If you aren't quantitative you must be exploitable. While your intuition might be very good, it will occasionally be wrong. If you aren't doing the math, every time you are wrong costs you something.
Now the intuitive guy can make up edge in all sorts of places elsewhere. He can be better at player projections. He can be better at trading. He can be better at scouting and grabbing timely guys out of the claim pool. But in the auction itself, to the extent that there IS a right answer to what a guy is worth- the intuitive player is going to be hard put to ever beat a good quant with an accurate model. To the extent that being a 'genius' just means you have better player projections than the world, that's great and a huge source of edge. To the extent that it means you aren't being quantitative, that's going to cost you.
To frame the problem more precisely I gave Chris a question Bill likes to embarrass me with. Imagine you knew that a player, let's call him Skip Kazmir, was going to hit exactly 20 HRs, 100 RBIs, 90 runs, seven steals and a .313 batting average in 554 at bats next season. What would you value Skip at in auction dollars in a 5×5 mixed 12 team league?1 The point of the question is this- if with perfect knowledge of Skip's performance there is a wide disagreement over his value, how can we pretend to expertly price Skip in an environment where instead of perfect information I only have a probability distribution for his likely performance?
Certainly the experts are better at projecting players, but if they don't precisely know the value of the end results of their projections what good is the more accurate information? Poker analogy- Imagine being so good you can precisely know whether your opponent has AQ, AK, or 88 but you don't know how those hands match up against your own pocket jacks.
Also, what happens to the intuitive competitor who doesn't have Chris' genius type differences with the consensus projections?
I'm a huge believer in the power of intuition. It's pretty amazing how accurately and how quickly we can make extremely complicated decisions. However, in the context of fantasy analysis I don't see how even a great intuition can keep up with a great model.
1 This question is a bit like saying 'imagine you were dealt pocket jacks next hand, how would you value them?' You clearly want to know a whole host of other information like stack sizes, position, action in front of you, etc etc. It's really not the details of the question thats important though, so let's just assume any other details you might want to know are also specified.