France v Portugal

What does it mean to say that you’re not “confident” that prices in betting markets are good predictors of what will happen (which I assume is what you mean when you say “a good guide to the truth”? At least in sports, there’s a long empirical record of betting-market predictions and outcomes we can look at to determine whether prices are good predictors or not. And that record shows that in sports like horse racing, college basketball, and professional football, bettors do an exceptionally good job of assessing the probability of victory (and, more than that, of predicting margins of victory, too). I don’t know what the evidence shows with regard to soccer, but I’m sure someone has studied it. So why is this a question of faith — which I think is what “I’m not as confident” implies — rather than science (using that term in a loose way, to be sure)?

Three quick things about betting markets.

First, I wish there was a market on things like “One of the first comments will be a throwaway line about betting markets” attracting one of the first comments. I’d like totally clean up on those.

Second, I don’t think markets in sports are as good as k williams suggests. I thought (and I don’t have refs to hand, so I could be wrong) that there was evidence that long shots are systematically overpriced by the market.

Third, the comment in the post was quite deliberately not about sports. (So I get to appeal to evidence like earlier posts about arbitrage possibilities in the papal betting market.)

The reference to the commentators was about previous threads on betting markets. Some commentators think that the success (such as it is) of naturally occuring markets means we should try and set up artificial betting markets on things like “There will not be a terrorist attack in Peoria in the next 18 months”. And I’m persuaded by the arguments that artificially constructed betting markets (i.e. betting markets set up not for various people to make money, but for the purpose of aggregating information) won’t work as well as natural betting markets.

So all in all I think it’s a bit rude to say I’m appealing to faith rather than science here, since there have been quite a lot of good arguments (on both sides) put forward on CT over the years.

I’ve noticed in some conversations that France are still seen as being an “Arsenal side”. Someone I spoke with yesterday, for instance, said she couldn’t support France because she hates Arsenal too much. But of course there are now more Man U and Chelsea players on France than Arsenal ones. (Newcastle and Arsenal actually have the same number: one. Slight difference in quality between the two players, though.)

Despite my misgivings about cheering for a side that is 17% ManU+Chelsea, I’ll be supporting France, because I think they have the capacity to play the better football and offer us a better final.

Allez, les concierges!

Maybe most people you KNOW are rooting for France (if they are English, that is understandable, but worrying – next will be Argentina?);
but most of the COUNTRIES I know (just search the web, or better yet, check with Portuguese embassies around the world getting thousand of messages of support) want a Portuguese victory.
Anyway, for Portugal this is already a victory; and the jealousy…

I hope they both lose. Only kidding.

The Dutch should be hanging their heads in shame instead of bitching about Portugal.

Well, now the public in France has turned and it’s on again with the team, the coach, footbal ; the politics have started making folksy footbalistic noises, and the team itself seem to be more comfident.

Nevertheless, i think they may make it.

Portugal dominates the early game, at least. The french are talking to each other a lot – hope they can find the key.

Every french victory is a slap in Le Pen’s face since the team is a great mix of immigrants.

Higher likelihood of upsets in “soccer”:

http://cnls.lanl.gov/~ebn/pubs/sports/html/

now back to the match ….

Wasn’t aimed at you Brian, but at K.Williams.

Came here looking for a post on this:

MOGADISHU, Somalia (AP) – Radical Islamic militia fighters in Somalia shot and killed two people who were watching a banned World Cup soccer broadcast, a radio station reported Wednesday.

The hard-line Muslim fighters, who have banned watching television, opened fire after a crowd of teenagers defied their orders to leave a hall where a businessman was showing Tuesday’s Germany-Italy match on satellite television, according to Shabelle Radio, an independent local station. It said the businessman and a teenage girl were killed.

Think about *that*, sports fans.

Poor Saha, but Thuram was magnificent.

Now Italy. They definitely have scores to settle with the french team, and they’re a pain in the back to play against. Ah well : on est en finale! :)

You write a post headlined “France v. Portugal,” in which you quote someone talking about the odds on Portugal winning, and write that you’re not confident that prices in betting markets are a good guide to the truth. But you think that it’s unfair of me to assume that you’re implying that the odds on football matches are not a good predictor of their eventual outcome? What are we, back in the Chomsky thread again?

Chris, that’s an interesting paper, but I don’t see how it tells us anything about whether betting markets do or do not do a good job of predicting outcomes in soccer games. The authors’ definition of “underdog,” as far as I can tell, is the team that at the end of the season had fewer wins (with upsets being games in which the underdog beats the favorite). But we want to know if betting markets did a good job of identifying the underdogs or not — in other words, whether the markets did a good job of predicting the likelihood of an upset. The paper doesn’t speak to this point at all, unless I’m misunderstanding their definition of “underdog.” (And I don’t think I am — it’s unlikely they collected data on FA betting markets dating back to 1888.)

Cona. cona. cona!

Nice. Blue is my favorite color.

Definitely a game to make you cheer on Italy. Portugal were diving all over the place, but at least they looked liked they wanted to win. The French looked lazy (especially Henry, as always).

39: that would be true even if the bookies had perfect knowledge of the probabilities involved.

How well they estimate those probabilities is a different question, although probably not one with an answer ‘so badly that by following a simple rule, you can beat the house take and make a consistent profit’.

Chris, you now have me officially confused. No one has ever argued that the test of betting markets’ accuracy is whether favorites win all the time — of course there are upsets. Surely the test is whether the markets are better than random — or, to be more specific with regard to soccer, whether the probabilistic forecasts implied in the moneyline are accurate. But that can only be measured over time.

More to the point, I don’t understand how the two parts of your statements work together: a season is just made up of 38 individual games. If the market is bad at predicting the outcome of the individual games, it has to be bad at predicting the outcome of the season. But you’re arguing that it can be bad at the former, but good at the latter. This makes no sense to me, unless all you’re saying is that there’s more noise in the forecasts for a single game. This is obviously true, but it doesn’t invalidate the usefulness of relying on the market for a forecast.

The argument for betting markets is not that they’re in any sense infallible. It’s that they offer the best (not the optimal, but the best available) probabilistic estimate of what will happen. I think you’re absolutely right that the low-scoring nature of soccer means that that estimate for any one game is going to be imperfect. But it’s still going to be a pretty good guide to what’s going to happen.

Here, by the way, is a paper on a toy market for the Euro 2000 championships, where the market called 15 out of 21 games correctly: http://citeseer.ist.psu.edu/558325.html

Portugal has much more talent than France and France, well… most of them aren’t really french…