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Monday, March 26, 2018

Scott Kingery and the Problem of the Prisoner’s Dilemma | FanGraphs Baseball

Never listen to the people.

There are two things in baseball that really pique my interest: rules and things that have never happened before. The Kingery extension is an example of the latter. This is something new, and that makes it interesting. What makes it doubly interesting is how my Twitter feed populated immediately after news of this deal had percolated through the interwebs for a time. People seemed to have one of two reactions:

1) Kingery signed a below-market deal just to avoid starting in the minors and having his service time manipulated, and therefore this contract is a joke.
2) The Phillies paid too much money to a guy who hasn’t shown anything (literally) at the big-league level yet, and therefore this contract is a joke.

The People seem to agree that the contract is a joke, but can’t quite agree on why. And both points can’t be true: if the contract is a joke because it’s a gross overpay, then it can’t also be a joke because it pays too little. And this got me thinking about the prisoner’s dilemma.

Jim Furtado Posted: March 26, 2018 at 02:38 PM | 46 comment(s) Login to Bookmark
  Tags: phillies, scott kingery

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   1. The Interdimensional Council of Rickey!'s Posted: March 26, 2018 at 02:58 PM (#5643251)
Kingery, who has posted precisely one half season of above-meh production (as a 23 year old repeater in AA, no less,) signed a deal to back stop the not unlikely possibility that he becomes Danny Santana. The Phils signed a deal to lock into a possibly useful player and cost-control his arb years, plus buy out three of his free agent years if needs be. This deal is not a joke. It is a rational agreement by both sides. Scott Kingery is not Mike Trout.
   2. Rally Posted: March 26, 2018 at 03:37 PM (#5643306)
Reading is a very good hitter's park, but Kingery did not load up his stats their in the first half. He hit 317/375/620 at home, but also 309/383/596 on the road. Overall between AA/AAA his road OPS is slightly better.

It's a good sign that this is a fair deal if half the people think the team overpaid, and half think the player got ripped off. I don't have an opinion to offer either way, one side of that might be correct, but it's a good sign towards a fair deal if there is not a consensus.

If a player says no to a deal like this, the worst the team could do is keep him in the minors for 3 more years (assuming he's got 3 options remaining). If they did that, he would make minimum wage the next 3 years, then less than 2 million combined for 2021-2023. Instead he'll make 24 million over that time. Had the Phillies played hard ball he would then be getting arbitration salaries for 2024-2026. It is unlikely he would do better than the 42 million he'll have coming if the Phillies pick up the options on those years. Kingery is definitely going to end up ahead of where his earnings would be if the Phillies played their worst hardball.

Teams seem willing to keep a player in the minors for a few weeks, maybe a few months, for service time reasons, it would be unprecedented to keep a player who is ready down for 3 years of AAA, but it's possible. I don't think the Phillies want to go in that direction first of all, because they think he can help the big league team, and second of all because that kind of hardball might push the union to file a grievance or rally the troops towards major changes in the next CBA.
   3. Rally Posted: March 26, 2018 at 03:41 PM (#5643310)
In my simulation league I disallowed this type of situation because I wanted to head off any attempts to abuse it. I did not want my team offering a young top prospect something like a 6 year, 10 million contract with the condition that if they don't sign, they stay in the minors. What I came up with is this: You can make such an offer, or you can use your remaining minor league options. But you can't do both. The minute the team makes such an offer to a prospect, his service time clock begins right then, whether he signs it or not.
   4. Mike Emeigh Posted: March 26, 2018 at 03:44 PM (#5643313)
There are two things in baseball that really pique my interest: rules and things that have never happened before. The Kingery extension is an example of the latter.


Except it's not. Evan Longoria did the same thing in 2008. By 2012, when his career path was clear, he signed an extension that added six years and $100 million to his contract.

-- MWE
   5. Walt Davis Posted: March 26, 2018 at 03:47 PM (#5643317)
Of course this has happened before. Longoria and Singleton at the very least. The Astros reportedly tried to force Springer into such a contract and kept him down longer because he wouldn't. Not quite the same thing but the Rays bought out Archer after 160 ML innings.
   6. McCoy Posted: March 26, 2018 at 03:47 PM (#5643319)
I don't think the Phillies had any intention or plan to keep Kingery down for three years. I would think the "or else" part for them would be we'll keep you down long enough to delay arbitration and FA. So Kingery could possible be stuck getting minimum wage for 4 seasons instead of 3.
   7. Man o' Schwar Posted: March 26, 2018 at 03:59 PM (#5643331)
It's a good sign that this is a fair deal if half the people think the team overpaid, and half think the player got ripped off. I don't have an opinion to offer either way, one side of that might be correct, but it's a good sign towards a fair deal if there is not a consensus.

I have a friend who is a judge, and he's said before that he knows he makes the right ruling in court when both sides are unhappy.
   8. Edmundo got dem ol' Kozma blues again mama Posted: March 26, 2018 at 04:24 PM (#5643361)
as a 23 year old repeater in AA


He had 166 PAs in AA the season before, repeater is an overreach.

The rating services have not been particularly high on him, but he seems like one of those guys who continues to get better. He's no sure-fire prospect like Singleton (nyuk, nyuk) -- for now this deal is damned interesting and I have no idea if it is good for the Phils or good for Kingery or good for both. The Phils staff must be convinced that he is going to be a good one.


   9. snapper (history's 42nd greatest monster) Posted: March 26, 2018 at 04:42 PM (#5643377)
I have a friend who is a judge, and he's said before that he knows he makes the right ruling in court when both sides are unhappy.

I hope he's not a criminal court judge.
   10. The Interdimensional Council of Rickey!'s Posted: March 26, 2018 at 04:52 PM (#5643381)
He had 166 PAs in AA the season before, repeater is an overreach.


Meh. Maybe. But he struggle to post a 600 in his first 166, then came back the next season and popped near 1000 on them before getting pushed to AAA and struggling there. Obviously the Phils see some talent in him, but this guy isn't a no-doubt blue chip can't miss by any means. Hedging his bets and taking the guaranteed 25 mil or so is a good idea.
   11. Misirlou doesn't live in the restaurant Posted: March 26, 2018 at 05:02 PM (#5643385)
Of course this has happened before. Longoria and Singleton at the very least. The Astros reportedly tried to force Springer into such a contract and kept him down longer because he wouldn't. Not quite the same thing but the Rays bought out Archer after 160 ML innings.


Matt Moore also. He signed his current contract after 9.1 IP in 2011.

edit: well, 19.1. he threw 10 IP in the 2011 post season.
   12. crict Posted: March 26, 2018 at 05:05 PM (#5643388)
The full text is not bad, but from an economic theory POV, that's not particularly close to a prisoner's dilemma. More like a bargaining with asymmetric information, and different risk aversion levels.
   13. Stevey Posted: March 26, 2018 at 05:12 PM (#5643397)
The rating services have not been particularly high on him


31 by both BA and BP, and 35 by MLB.com. No one is guaranteeing he's going to be a star, but he's pretty well rated.
   14. snapper (history's 42nd greatest monster) Posted: March 26, 2018 at 05:13 PM (#5643398)
The full text is not bad, but from an economic theory POV, that's not particularly close to a prisoner's dilemma.

I thought the same. Prisoners' dilemma requires that both parties be worse off by "defecting" than if they can cooperate.

Not signing this deal would not have made BOTH the Phillies and Kingery worse off. It would have made one of them worse off, and one better off.
   15. Davo and his Moose Tacos Posted: March 26, 2018 at 05:13 PM (#5643400)
If the owners keep working together to depress the salaries of free agents, we’re gonna see a lot more deals like this. That promise of “Just make it through 6 years and then you can get your payday” has worked since 95, but now that owners are reneging, we’re in for a corrective.
   16. Nasty Nate Posted: March 26, 2018 at 05:23 PM (#5643409)
If the owners keep working together to depress the salaries of free agents, we’re gonna see a lot more deals like this. That promise of “Just make it through 6 years and then you can get your payday” has worked since 95, but now that owners are reneging, we’re in for a corrective.
I may be wrong, but aren't free agents now making more (relative to both inflation and the MLB league minimum) than they were in the mid-to-late 90's?
   17. Stevey Posted: March 26, 2018 at 06:57 PM (#5643444)
but aren't free agents now making more (relative to both inflation and the MLB league minimum) than they were in the mid-to-late 90's?


Probably, but MLB revenue has well out-paced inflation, so merely beating inflation isn't that special. Players are bringing home a smaller percentage of the revenue than the 90s.

In 1995, the average MLB salary was 9.8 times the minimum, in 2000 it was 10 times, in 2015, it fell to 8.4 times.
   18. JRVJ Posted: March 26, 2018 at 08:20 PM (#5643481)
Longoria is not a comp for Kingery. Singleton is.

Question is: Will this signing provide the Angels with cover for a long term deal with Otami?
   19. McCoy Posted: March 26, 2018 at 08:22 PM (#5643482)
At this point why would they want to do that?
   20. McCoy Posted: March 26, 2018 at 08:23 PM (#5643483)
In 1995, the average MLB salary was 9.8 times the minimum, in 2000 it was 10 times, in 2015, it fell to 8.4 times.

So clearly MLB needs to lower the minimum wage.
   21. Walt Davis Posted: March 26, 2018 at 09:02 PM (#5643494)
If the owners keep working together to depress the salaries of free agents, we’re gonna see a lot more deals like this.

I think the opposite. These deals have been common and they made a lot of sense of the kids. Even signing through 31 would be OK because, if you were good, you could count on still getting one big, 5-year FA contract. Now nobody wants to sign a 31-year-old FA much less Kingery at 33. If they give away FA years cheap, they may be costing themselves big when they do become FAs.

Mainly it's just competing incentives. Given the uncertainty, it makes sense for young players to take deals like this. It's in the FA's and union's interest that (generally) they don't take deals like this. But the curtailing of FA prices for players in the 30s gives these young players less incentive to sign away the FA years in their 20s at these bargain option prices.
   22. Greg Pope Posted: March 26, 2018 at 09:27 PM (#5643500)
Mainly it's just competing incentives. Given the uncertainty, it makes sense for young players to take deals like this. It's in the FA's and union's interest that (generally) they don't take deals like this. But the curtailing of FA prices for players in the 30s gives these young players less incentive to sign away the FA years in their 20s at these bargain option prices.

The competing incentives mean that this is probably a good deal for both sides. For players like this, that aren't (as Rickey says) Mike Trout, what is a reasonable projection for salary if he hits? Sure, for the player that hits, he could make double. But the player that doesn't hit makes virtually nothing. Line up 10 players like Kingery and say "We'll offer you all $25M contracts now, or you can wait and half will make $50M and half will make $0". It's the exact same outlay for the owners, but all 10 kids should take it. The first $25M means way more than the second $25M.

The question is, how far do you push it? Depends on the percentage and the contracts. If 50% of the kids will make it, but their earnings would be $70M for making it, then the teams come out better, but the kids should still take it. How far do you have to push it so that it's not worth it? Pretty far I'd guess, because of the first $25M value.

I mean, if someone offers to bet you the value of your house (let's just say $400K) against your house, and they're offering a coin flip, then your odds are even. But you're a fool to take the bet since you probably can't afford to lose your house. If they offer you 2 coin flips and if they're both heads, you lose the house, but otherwise you win the money, then mathematically you should take it. But I wouldn't. I don't know how stacked the odds would have to be for me to bet my house.
   23. Nasty Nate Posted: March 27, 2018 at 08:38 AM (#5643559)
Question is: Will this signing provide the Angels with cover for a long term deal with Otami?
I don't think it affects their situation. I also doubt Ohtani would want a similar (albeit larger) extension at this point.
   24. bunyon Posted: March 27, 2018 at 08:50 AM (#5643566)
Pretty far I'd guess, because of the first $25M value.

I don't know how stacked the odds would have to be for me to bet my house.


I think this gets it exactly right. If you've never played a MLB game and someone offers you $24 million, you take it. Maybe even if you are Mike Trout. I mean, I can't remember and I don't follow prospects that closely but when was it clear Mike Trout was Mike Trout? LOTS of guys tear up amateur leagues and never pan out but I'd bet a lot of them think there is a chance they'll be Mike Trout. If you become Mike Trout, you're going to be very, very rich one way or the other. Sure, you may cost yourself a ten million here or there but you're not going to notice.

On the other hand, if you never develop or if you get hurt or sick or you end up on a team with lousy player development, etc. etc. etc. you might not make anything of note. You'd have to both believe in yourself insanely or have the winning bet pay off in the billions to turn down this deal. The trick, it seems to me, is getting teams to offer these deals. This is a terrible deal for the Phillies if the player flames out, which is going to happen often enough.


As to the house, geez. I have no idea what could prompt me to bet my house short of a cheat, a bet I knew somehow was 100%. If there is a 1% chance I lose my house, it doesn't really matter what the payoff would be. It's edging close to Russian roulette. If you had 17 revolvers, one of which had one bullet in it, and you would get a billion dollars if you picked up a random gun, put it to your head and pulled the trigger, would you? I would not.
   25. McCoy Posted: March 27, 2018 at 08:57 AM (#5643571)
How about a fastball to the nuts?
   26. bunyon Posted: March 27, 2018 at 09:04 AM (#5643575)
How about a fastball to the nuts?

Is that an offer? How fast do you throw?
   27. McCoy Posted: March 27, 2018 at 09:07 AM (#5643576)
Trout and Harper are a little different in that both came into the league very young and with Harper getting a sizable bonus to sign. Trout's extension still lets him hit the FA market before his age 30 so for Trout buying out 3 FA years at what was thought at the time and still quite possibly is a premium is a good risk on his part. Harper got paid early and has felt that he can ride out the service time and get paid big time as a really young FA.

Kingery on the other hand will be 24 years old and this contract potentially gives the Phillies control of him at a reasonable price through his age 32 season. If Kingery is the type of player you want to start on a roster at age 32 this is a bad deal for him. If he's the type of player that is only valuable when he is cheap this is a great deal for him. The interesting part will be after year 6 when the club has to decide if they want to extend him or not. If Scott is an okay starting second baseman after year 6 do you extend him for 41 million more dollars or do you say thank you? It's quite possible at that moment Scott could have gotten a 3 year 60+ million dollar deal or a 4 year 80 million or a 1 year 10 million.
   28. The Interdimensional Council of Rickey!'s Posted: March 27, 2018 at 09:08 AM (#5643577)
These deals have been common and they made a lot of sense of the kids. Even signing through 31 would be OK because, if you were good, you could count on still getting one big, 5-year FA contract.


It also makes far more sense for teams to pay players for their performative years, rather than pay them for their decline phase after they've peaked. Of course, given this trend, a real MLBPA leadership would push very, very hard to move the arbitration process forward and get the younger kids something closer to market rate for those peak years. Right now it's overbalanced toward management.
   29. McCoy Posted: March 27, 2018 at 09:09 AM (#5643578)
Is that an offer? How fast do you throw?

Not hard enough to gamble a billion dollars on it but for that kind of money I'd used a German 88.
   30. McCoy Posted: March 27, 2018 at 09:10 AM (#5643579)
The next round MLBPA should be pushing for something like 3 years before FA, minimum wage increase, and a way to protect against service time shenanigans and hostage situations. The last part I don't know what an effective way to do that would be.
   31. Random Transaction Generator Posted: March 27, 2018 at 09:34 AM (#5643587)
In 1995, the average MLB salary was 9.8 times the minimum, in 2000 it was 10 times, in 2015, it fell to 8.4 times.


Is this the case where the free agent salaries went down (unlikely), or more of a case where more players are in the majors playing for (or close to) the major league minimum (likely)?

I think the better comparison would be the average MLB salary for arb-eligible/free-agent-eligible players compared to the league minimum salary.

   32. Nasty Nate Posted: March 27, 2018 at 09:55 AM (#5643601)

Probably, but MLB revenue has well out-paced inflation, so merely beating inflation isn't that special. Players are bringing home a smaller percentage of the revenue than the 90s.
Salary relative to revenue is certainly important and relevant, but in terms of the "payday" in Davo's #15, it may not be the key factor.
   33. Random Transaction Generator Posted: March 27, 2018 at 09:56 AM (#5643603)
I wonder if these kind of deals would work going forward:

It's a 5 year deal.
The first three years are at X million per year (average).

The fourth year is a dual option: The player can take the option (for 75% of X), or the team can take the option (for 125% of X).
The fifth year is a dual option: The player can take the option (for 60% of X), or the team can take the option (for $150% of X).
If neither side takes an option, the player is an unrestricted free agent for that upcoming season.

This means the player is covered if he gets injured/sucks, but the team isn't out as much.
As well, if the player does better than expected then he can go to free agency...unless the team pays out a premium to keep him.
   34. What did Billy Ripken have against ElRoy Face? Posted: March 27, 2018 at 11:03 AM (#5643657)
So many comments to the effect of "this is a bad deal for the player if he performs to X level, and it's a bad deal for the team if he performs to (X-Y) level." It's neither. Like trades, don't we have to evaluate it based on the information we/the parties have now? The only reasonable way to analyze these kinds of deals is that the team and the player are trading different present-day risk profiles. While that of course means that only a very rudimentary evaluation is possible for the vast majority of these types of deals, given how inherently lacking the information is, it seems like a pretty reasonable concept for both parties.
   35. McCoy Posted: March 27, 2018 at 11:09 AM (#5643664)
The ifs basically say the same thing. We all accept as fact that Kingery signed so that he's financially sound and the Phillies offered the deal as a cost control.
   36. Nasty Nate Posted: March 27, 2018 at 11:24 AM (#5643676)
Like trades, don't we have to evaluate it based on the information we/the parties have now?
Like trades, we should evaluate the decisions of the players/teams based on the information they have now. But we can evaluate the trade/extension itself based on how it actually turns out.
   37. Pat Rapper's Delight (as quoted on MLB Network) Posted: March 27, 2018 at 11:54 AM (#5643690)
more players are in the majors playing for (or close to) the major league minimum (likely)?

Sounds reasonable. None of the anonymous middle relievers riding the AAA shuttle can be making much more than the minimum, can they?
   38. bunyon Posted: March 27, 2018 at 11:59 AM (#5643694)
It seems to me that, at the present time, this is only a bad deal for Kingery if he becomes Mike Trout.

It's a bad deal for the Phillies unless he becomes Mike Trout.

The odds are overwhelming that he won't become Mike Trout so it's a better deal for Kingery than the Phillies. But, even if he does become Mike Trout, Kingery will get paid big time somewhere down the line. And, even if he becomes Mike Trout, wouldn't the Phillies have been happy to pay him big time several years down the road? I mean, if they wait a couple years to see if he is Mike Trout, wouldn't that be worth several tens of million more than the $65 million they have him, potentially, locked in for?

It seems to me the deal is weighted heavily toward Kingery. A team should be overjoyed if one of their young players blooms into Mike Trout and, when it happens, they can happily pay the piper.

Put it this way: the Angels aren't unhappy or suffering financially because of Mike Trout.
   39. snapper (history's 42nd greatest monster) Posted: March 27, 2018 at 12:36 PM (#5643726)
It seems to me that, at the present time, this is only a bad deal for Kingery if he becomes Mike Trout.


Nah. If he becomes Dustin Pedroia, it's a bad deal.
   40. Dandy Little Glove Man Posted: March 27, 2018 at 01:13 PM (#5643765)
The odds are overwhelming that he won't become Mike Trout so it's a better deal for Kingery than the Phillies.

If he becomes Ray Durham (i.e. a perennial 3-Win player with power and speed), both sides did well. Kingery would make a bit more in the guaranteed part of the deal than he'd likely get through arbitration, and he'd avoid potential shenanigans to delay his MLB career. The Phillies, in turn, would get a good deal on the option years, plus the benefit of not being on the hook for any expected decline.
   41. dave h Posted: March 27, 2018 at 02:33 PM (#5643830)
I think it's worth pointing out that the author gets the dilemma wrong. The goal isn't to avoid the worst case scenario. It's that no matter what your opponent does, you're better off defecting. If the payoffs aren't set up that way, then it's not a prisoners dilemma. And one way out of the dilemma is having repeated iterations of the game (which is true in this case for the team but not the player).
   42. snapper (history's 42nd greatest monster) Posted: March 27, 2018 at 02:38 PM (#5643836)
I think it's worth pointing out that the author gets the dilemma wrong.

Yes, see [12] and [14] above.
   43. Misirlou doesn't live in the restaurant Posted: March 27, 2018 at 02:58 PM (#5643854)
I think it's worth pointing out that the author gets the dilemma wrong.

Yes, see [12] and [14] above.


I thought the dilemma was if they both stay silent, they get a minimal punishment. If one talks and the other remains silent, the talker goes free and the silent one gets a large punishment. If they both talk they each get a medium punishment.

That's not to say the author is correct, but your explanation in 14 seems off.
   44. dave h Posted: March 27, 2018 at 05:11 PM (#5643922)
Oops, sorry, saw 12 but not Snapper's 14 pointing out exactly why it's not a prisoners dilemma. As he said, the point is that if your opponent talks, you're better off talking. But even if your opponent stays silent (cooperates) you're still better off defecting. That requires a specific serf of payoffs.

The reason people want to eliminate the worst outcome is risk aversion. There's no reason why cooperation is disfavored (and in fact it's expected since two parties with different risk aversion can find mutual value in trade).
   45. Rally Posted: March 27, 2018 at 09:01 PM (#5644001)
I think it’s safe to say Kingery won’t be Mike Trout. In a month he’ll turn 24. In Trout’s age 24 season he would finish his 5th consecutive season finishing first or second in MVP voting.

Neil Walker made 29 million over his first 6 years, so if Kingery turns out that we’ll the Phillies will have a good deal.
   46. Walt Davis Posted: March 27, 2018 at 09:55 PM (#5644021)
Just so I'm clear, I think young players should usually make this choice, especially anybody who's not a star (Kingery, Marte). $24 M through your arb years is still good money, the payoff for the team is in those option FA years. The points I'm trying to make, probably not so clearly are that (1) the MLBPA should try to find a way to put more of the leverage on the young player's side of the equation and (2) deals like this are becoming less attractive for the players if this year's FA market is an indicator of the future.

Marte is the better of the two deals. He's already been disadvantaged on service time (1.162 days) so he might as well make the best of a bad situation. He's also ahead on service time relative to Kingery so he'll be an FA entering his age 31 season which is (no longer) ideal but still in a position to land a 3-4 year contract if he's good. (By the way, there's something wrong in the reporting of his contract -- at Cots and b-r, the salaries add up to $19, the options have $1 M buyouts and Cots doesn't mention a signing bonus. If he did get a signing bonus, front-loading the contract is also a benefit.

I'm not entirely sure that the DBacks are up to, with Ahmed and Owings also on the team.

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