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Nov 112009
 

The only way the demographics of your pool would not matter would be if all other participants picked teams at random. If that were the case, you could just pick all the favorites all the time. You’d win all the season-ending payouts and more weekly payouts than anyone else.

But they don’t pick at random, do they? They mostly pick favorites, sprinkling in a few upsets here and there. That creates an opportunity for you, at least in terms of winning more weekly payouts than anyone else.

By picking mostly favorites most of the time, the other participants are behaving rationally as individuals but irrationally as a group. Take a look at some of the weaker favorites — those whose Win Probabilities are less than 70% — and you’ll notice that frequently the percentage of participants who picked them was still quite high, maybe over 90%. If the Win Probabilities are accurate, those favorites might lose between one third and half the time but when they do almost nobody in your pool will reap the benefit. So why don’t you reap the benefit?

The trick is threefold: 1) Forecast the number of participants in your pool who will pick each team, 2) identify underbet teams relative to their win probabilities, and 3) simulate game/pool outcomes thousands of times to determine the optimal number of underbet teams to pick in your pool. Those form the basis of Weekly Payout Maximizer recommendations.

The right number changes from week to week, according to the win probabilities and fan pick forecasts. For Regular scoring pools it’s also different from the right number for Confidence pools.

 Posted by on November 11, 2009 at 10:05 am