Featured Research

from universities, journals, and other organizations

Does the wisdom of crowds prevail when betting on football?

Date:
November 15, 2010
Source:
University of Chicago Press Journals
Summary:
Point spreads -- the number of points by which a strong team can be expected to defeat a weaker team -- are supposed to reflect the "wisdom of crowds." But a new study found that crowds don't have a clue.

Point spreads -- the number of points by which a strong team can be expected to defeat a weaker team -- are supposed to reflect the "wisdom of crowds." But a new study in the Journal of Consumer Research found that crowds don't have a clue.

Related Articles


"Point spread betting markets seem to offer an important example of crowd wisdom, because point spreads are very accurate and are widely believed to reflect the 'crowd's' prediction of upcoming sporting events," write authors Joseph P. Simmons (Yale University), Leif D. Nelson (University of California at Berkeley), Jeff Galak (Carnegie Mellon University), and Shane Frederick (Yale University). But previous research shows that bettors are biased in their predictions; their intuitions tend to favor "favorites" over "underdogs."

The authors conducted a season-long investigation of the betting habits of enthusiastic NFL football fans from diverse regions of the United States. Participants wagered more than $20,000 on football games against point spreads that were manipulated to favor the underdog.

The authors first tested a hypothesis that crowds will wisely choose underdogs against spreads that disadvantage favorites. The bettors failed this test, predicting vastly more favorites (89 percent) than underdogs. Next, they found that even when bettors were warned that the spreads had been increased they still predicted favorites only slightly less often (83 percent).

"In this context, the temptation to rely on one's intuition is so strong as to lead people to rely on what they intuitively feel to be true (this favorite will prevail against the spread) rather than on what they generally know to be true (the favorite will usually lose against the spread)" the authors write. And it seems people have trouble learning from their mistakes: the crowd's predictions worsened over time, rather than getting better.

Finally, the researchers hit upon a method of eliciting better choices. "Asking people to predict point differentials rather than make choices against point spreads decreased reliance on faulty intuitions and produced vastly different, and vastly wiser, predictions against the spread," the authors conclude.


Story Source:

The above story is based on materials provided by University of Chicago Press Journals. Note: Materials may be edited for content and length.


Journal Reference:

  1. Joseph P. Simmons, Leif D. Nelson, Jeff Galak, and Shane Frederick. Intuitive Biases in Choice vs. Estimation: Implications for the Wisdom of Crowds. Journal of Consumer Research, June 2011

Cite This Page:

University of Chicago Press Journals. "Does the wisdom of crowds prevail when betting on football?." ScienceDaily. ScienceDaily, 15 November 2010. <www.sciencedaily.com/releases/2010/11/101115151946.htm>.
University of Chicago Press Journals. (2010, November 15). Does the wisdom of crowds prevail when betting on football?. ScienceDaily. Retrieved March 5, 2015 from www.sciencedaily.com/releases/2010/11/101115151946.htm
University of Chicago Press Journals. "Does the wisdom of crowds prevail when betting on football?." ScienceDaily. www.sciencedaily.com/releases/2010/11/101115151946.htm (accessed March 5, 2015).

Share This


More From ScienceDaily



More Science & Society News

Thursday, March 5, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Gas Production Cut on Earthquake Fears

Gas Production Cut on Earthquake Fears

Reuters - Business Video Online (Mar. 5, 2015) — The Dutch government has cut production at Europe&apos;s largest gas field in Groningen amid concerns over earthquakes which are damaging local churches. As Amy Pollock reports the decision - largely politically-motivated - could have big economic conseqeunces. Video provided by Reuters
Powered by NewsLook.com
Obamacare's Strange New Supreme Court Case

Obamacare's Strange New Supreme Court Case

Newsy (Mar. 4, 2015) — President Obama&apos;s healthcare law is facing its second Supreme Court challenge, and it hinges on a single sentence. Video provided by Newsy
Powered by NewsLook.com
Prince William Calls for Unified Effort Against Illegal Wildlife Trade

Prince William Calls for Unified Effort Against Illegal Wildlife Trade

Reuters - Entertainment Video Online (Mar. 4, 2015) — Britain&apos;s Prince William pledges to unite against illegal wildlife trade on the final day of his visit to China. Rough cut - no reporter narration Video provided by Reuters
Powered by NewsLook.com
Analysis: Supreme Court Hears ACA Challenge

Analysis: Supreme Court Hears ACA Challenge

AP (Mar. 4, 2015) — Associated Press legal reporter Mark Sherman breaks down the details of the latest Affordable Care Act challenge to make it to the Supreme Court. (March 4) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
 
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:  

Breaking News:

Strange & Offbeat Stories

 

Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:  

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins