TY - GEN
T1 - Estimating collective belief in fixed odds betting
AU - Chen, Weiyun
AU - Li, Xin
AU - Zeng, Daniel
PY - 2011
Y1 - 2011
N2 - 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.
AB - 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.
KW - computational experiments
KW - fixed odds betting
KW - prediction markets
UR - https://www.scopus.com/pages/publications/79960261413
U2 - 10.1007/978-3-642-22039-5_6
DO - 10.1007/978-3-642-22039-5_6
M3 - Conference article published in proceeding or book
AN - SCOPUS:79960261413
SN - 9783642220388
T3 - Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
SP - 54
EP - 63
BT - Intelligence and Security Informatics - Pacific Asia Workshop, PAISI 2011, Proceedings
T2 - Pacific Asia Workshop on Intelligence and Security Informatics, PAISI 2011
Y2 - 9 July 2011 through 9 July 2011
ER -