Are Traded Players "Lemons"? An updated study
Here's something kind of shocking I found when I looked at the performance of traded players.
I took all batters from 1901 to 1975 who started a season with a new team. I eliminated all players whose Marcel predictions had them projected to have fewer than 400 PA that year. I also eliminated all players who had less than 1,000 Runs Created for their career so far. So I'm left with 102 full-time players with good careers so far.
Then, for each of those players, I used similarity scores to find a control, the closest match in Marcels for that year among non-traded players. The control had to be the same age and play the same position.
So now I have two groups of 102 players each, controlled for age and position, with almost identical projections for that year. The only difference appears to be that one group was traded, and the other was not.
How do you think their actual performance would compare for the subsequent season?
If you thought the two groups would have similar performance that year, you'd be right. Their composite batting lines were very close.
So far, no surprises.
Now, consider moving beyond that season. You still have the same two groups, who are the same age, play the same position, had identical Marcels last year, and performed identically last year. The only difference between the two groups is that, in one of the groups, every player was traded before last season.
How would you expect the rest of their careers to match up?
This time, if you thought they'd be nearly identical, you'd be very wrong. It turns out that the control group played 60 percent longer than the traded group, and, in addition, was more productive -- by almost three quarters of a run created per 27 outs.
Why does that happen? I'm not sure, but I have some guesses (and full details with all the numbers) in a draft of a followup to my 2004 "Are Traded Players Lemons?" study. The draft of the new study is here (and contains a link to the old study).
I'd appreciate any comments you might have on the new study, and any other hypotheses you might have that I didn't think of.
(P.S. Many thanks to Jeff Sackmann, who published a database of Marcels last month, making the study possible.)
UPDATE: in light of some of the comments, especially from Guy, I've updated the study ... before, I thought there might be a lemons effect. Now, I'm not so sure.
Use the same link.