Estimating collective belief in fixed odds betting

Weiyun Chen, Xin Li, Daniel Zeng

Research output: Chapter in Book/Report/Conference proceedingConference 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 languageEnglish (US)
Title of host publicationIntelligence and Security Informatics - Pacific Asia Workshop, PAISI 2011, Proceedings
Pages54-63
Number of pages10
DOIs
StatePublished - Jul 18 2011
Externally publishedYes
EventPacific Asia Workshop on Intelligence and Security Informatics, PAISI 2011 - Beijing, China
Duration: Jul 9 2011Jul 9 2011

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume6749 LNCS
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349

Other

OtherPacific Asia Workshop on Intelligence and Security Informatics, PAISI 2011
CountryChina
CityBeijing
Period7/9/117/9/11

Keywords

  • computational experiments
  • fixed odds betting
  • prediction markets

ASJC Scopus subject areas

  • Theoretical Computer Science
  • Computer Science(all)

Fingerprint Dive into the research topics of 'Estimating collective belief in fixed odds betting'. Together they form a unique fingerprint.

  • 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