"Given the option value and the buyout amount, the player will estimate the likelihood that the team will actually exercise the option. So if you offer a deal that's 1 year/5M with a 10M option, he will try to figure out how often that option will come into play. If he thinks it's a 50/50 whether it's accepted, then he will essentially value the deal as a "1.5 year"/10M contract offer.
Vesting options work in a similar way - the player estimates the chance that the vesting option will vest. So if you set a vesting option for 800 PAs, he's going to ignore it completely, but 400 PAs he'll try to figure out the odds that he'll hit the 400 PAs to trigger it.
Now I don't want to give away all our secrets,but pre-FA guys have also been tweaked. I've gotten rid of my traditional "Give them their arbitration estimate for 3-4 years, and now I have a young guy who will be a superstar for a ridiculously cheap deal" (on a side note, in my game I signed a guy who's now won multiple MVP awards and is a consistent .300 hitter with 30+ HRs to a 10 year deal worth 2.5M per year. He won't accept a deal like that in 16). Arb or pre-arb guys will essentially ballpark their value, so if you want to sign a guy to a 3 year deal, he'll try to figure out roughly speaking what he'd get in arbitration over that time, and won't sign a deal for much less than that."