Estimating collective belief in fixed odds betting

Weiyun Chen; Xin Li; Daniel Zeng

doi:10.1007/978-3-642-22039-5_6

Estimating collective belief in fixed odds betting

Weiyun Chen, Xin Li, Daniel Zeng

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

2 Scopus citations

Abstract

Fixed odds betting is a popular mechanism in sports game betting. In this paper, we aim to decipher actual group belief on contingent future events from the dynamics of fixed odds betting. Different from previous studies, we adopt the prospect theory rather than the expected utility (EU) theory to model bettor behaviors. Thus, we do not need to make assumptions on how much each bettor stake on their preferred events. We develop a model that captures the heterogeneity of bettors with behavior parameters drawn from beta distributions. We evaluate our proposed model on a real-world dataset collected from online betting games for 2008 Olympic Game events. In the empirical study, our model significantly outperforms expert (bookmaker) predictions. Our study shows the possibility of developing a light-weight derivative prediction market upon fixed odds betting for collective information analysis and decision making.

Original language	English (US)
Title of host publication	Intelligence and Security Informatics - Pacific Asia Workshop, PAISI 2011, Proceedings
Pages	54-63
Number of pages	10
DOIs	https://doi.org/10.1007/978-3-642-22039-5_6
State	Published - Jul 18 2011
Externally published	Yes
Event	Pacific Asia Workshop on Intelligence and Security Informatics, PAISI 2011 - Beijing, China Duration: Jul 9 2011 → Jul 9 2011

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	6749 LNCS
ISSN (Print)	0302-9743
ISSN (Electronic)	1611-3349

Other

Other	Pacific Asia Workshop on Intelligence and Security Informatics, PAISI 2011
Country	China
City	Beijing
Period	7/9/11 → 7/9/11

Keywords

computational experiments
fixed odds betting
prediction markets

ASJC Scopus subject areas

Theoretical Computer Science
Computer Science(all)

Access to Document

10.1007/978-3-642-22039-5_6

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Cite this

Chen, W., Li, X., & Zeng, D. (2011). Estimating collective belief in fixed odds betting. In Intelligence and Security Informatics - Pacific Asia Workshop, PAISI 2011, Proceedings (pp. 54-63). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 6749 LNCS). https://doi.org/10.1007/978-3-642-22039-5_6

Estimating collective belief in fixed odds betting. / Chen, Weiyun; Li, Xin; Zeng, Daniel.

Intelligence and Security Informatics - Pacific Asia Workshop, PAISI 2011, Proceedings. 2011. p. 54-63 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 6749 LNCS).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Chen, W, Li, X & Zeng, D 2011, Estimating collective belief in fixed odds betting. in Intelligence and Security Informatics - Pacific Asia Workshop, PAISI 2011, Proceedings. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 6749 LNCS, pp. 54-63, Pacific Asia Workshop on Intelligence and Security Informatics, PAISI 2011, Beijing, China, 7/9/11. https://doi.org/10.1007/978-3-642-22039-5_6

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