Predicting the Oscars

February 22, 2015
Posted by Jay Livingston

Of the films nominated for Best Picture, “American Sniper” is the clear winner at the box office. But will it will win Best Picture? or Director? or Actor?  Nobody thinks so, even its ardent supporters on the political right. How do they know?

It’s not like elections, where a hundred polls blossom to survey voters. Google Consumer Surveys did as the public (though not a random sample), and Sniper easily picked off the competition. David Leonhardt at the New York Times (here) provided this graph:

(Click on a graphic for a larger view.)

But the Oscars are decided not by the public but by the Academy. Nobody is polling them. Their views are not those of the public (or those on both the right and left put it, they are “out of touch”). So we are left with the equivalent of what readers of the racing from know as “past performances” - other races against the same competition. That means the critics’ ratings, the Golden Globes, BAFTA, and SAG. In all these the Sniper crew were pretty much left out in the desert.

We also have the prediction markets, where the price of an investment reflects roughly the collective wisdom of the bettors. Several posts in this blog have contrasted this  “wisdom of crowds” with the views of “the smart money,” a relative handful of professional bettors. By watching the moves of the point spread, you can make a pretty good guess as to which side the crowd is on. If you had bet against their wisdom on NFL games this past season, you’d be well on the plus side.

With the Academy Awards, while the public may have an opinion, they do not place bets, except in office pools. My guess is that the action at the prediction markets comes mostly from a much smaller and better-informed number of participants.  It’s all smart money. And they do not think much of Sniper’s chances.  Predictwise has “Birdman” as having a 67% chance of winning, “American Sniper” only a 0.3% chance. The comparable figures at Betfair are 60% and 1.5% respectively.

The prices at Hollywood Stock Exchange tell a slightly different story.

How do the HSX bettors decide what to bid? I don’t know. I thought that history of the price changes might provide a clue. In some cases, the betting suggests a kind of cascade. People see the price going up and follow what they assume is smart money. The performances of J.K. Simmons, Patricia Arquette, and Julianne Moore were no better – relative to the competition – yesterday than they were a month earlier. But in that month the price of Arquette relative to that of Felicity Jones has gone from about 2.5-1 to 9-1.*

Other changes are more puzzling. Here are the prices for “Birdman” and “American Sniper.”

 

On  Jan. 23, a bet that would pay $25 if  “American Sniper” won cost $8.91, while a similar bet on “Birdman”was only $1.51.  Now a “Birdman” bet costs six times as much as “American Sniper.” What happened on Jan. 23? I don’t know. It wasn’t the announcement of winners at BAFTA, Golden Globes, or SAG.  Maybe some more knowing reader can provide some enlightenment.

UPDATE: Feb. 22, 8:30 p.m. EST.  Since I  grabbed those HSX graphs yesterday, the bettors have been hitting “Birdman”and abandoning “Boyhood.”  As the market moved to the close, “Birdman” would have cost you another $10. “Boyhood” was cheaper by a similar amount. If this were football, I’d be going with “Boyhood.”
-------------------------------

* Simmons, Arquette, and Moore now look like sure things. For my favorite anecdote about Oscar predictions, see this 2007 post  about the time I put a multiple-choice question on the midterm asking what would win Best Picture.