The Wisdom of Crowds IV (Superbowl LXII)

February 5, 2008
Posted by Jay Livingston

1. The Statistical Wisdom of Oddsmakers.

Andrew Gelman writes:

if you look up "football" in the index of Bayesian Data Analysis, you'll see that football point spreads are accurate to within a standard deviation of 14 points, with the discrepancy being approximately normally distributed. So, a 14-point underdog has something like a 15% chance of winning. It's funny how people don't get this sort of thing.

The Giants were a 12-point underdog. The money line was about 9:2 – very close to the line Andrew would have set given the point-spread. Do bookies all have well-thumbed copies of Bayesian Data Analysis on their bookshelves?

2. The NonWisdom of Oddsmakers, the Wisdom of Crowds.

The oddsmakers set the opening line at 13 ½, but not because they thought that represented the strengths of the teams. They thought that the “true” line should be 12 or 12 ½. They reasoned that a lot of unwise bettors – people who bet on only the Superbowl and don’t know much about football – would be bet New England. The Patriots after all were undefeated, the Team of the Century, and all the rest of the hype. These bettors, so the logic went, would bet the Pats even at the inflated line.

But from the start, the supposedly naive money came in on the Giants. The line came down, and people still bet the Giants. The bookies took a bath. It happens.

3. Local Color.

David Tyree, the Giant who made The Catch, is a graduate of Montclair High School.

For other posts in this blog on football, betting, and the wisdom of crowds, go here.