Estimating collective belief in fixed odds betting

Weiyun Chen, Xin Li, Dajun Zeng

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Citations (Scopus)

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 publicationLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Pages54-63
Number of pages10
Volume6749 LNCS
DOIs
StatePublished - 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)03029743
ISSN (Electronic)16113349

Other

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

Fingerprint

Odds
Game
Prospect Theory
Information analysis
Utility Theory
Beta distribution
Prediction
Expected Utility
Sports
Model
Empirical Study
Decision making
Decision Making
Derivatives
Derivative
Beliefs
Evaluate

Keywords

  • computational experiments
  • fixed odds betting
  • prediction markets

ASJC Scopus subject areas

  • Computer Science(all)
  • Theoretical Computer Science

Cite this

Chen, W., Li, X., & Zeng, D. (2011). Estimating collective belief in fixed odds betting. In Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics) (Vol. 6749 LNCS, 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, Dajun.

Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics). Vol. 6749 LNCS 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 proceedingConference contribution

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