Wisdom of the crowd

Hi Guys

“Wisdom of crowds is the idea that large groups of people are collectively smarter than individual experts when it comes to problem-solving, decision-making, innovating, and predicting” - While obviously not always true as the DG model has already shown I think its something to take into consideration.

A good example of crowd wisdom is the ‘Guess the amount of JellyBeans in the jar’ carnival game. Individually almost all are wrong, some are close and some are incredibly far off base, but, when you take the average of all the guesses you get a number that is surprisingly close to the correct amount.

I am sure you have all heard about the guy who went to Hong Kong to bet on horses and made over a billion. Just like the legends here at DG he was very clever at modelling many factors in each race. In the beginning he was successful but not to the tune of billions until he started to incorporate publicly available odds into his model (as well as other adjustments). To what degree or how he weighted these odds and incorporated them I’m not really sure, however he did say that it was one of his most successful changes to the model he had made.

The DataGolf model is clearly very accurate however it can only be as accurate as the information it has been given. The punters over at BetFair Exchange are a good example of a hive mind making a decision, thousands of profit motivated individuals unknowingly modelling a golfers chances on any given spot using all the available info they have. Can thousands of bettors take into account something that could be considered difficult to model and quantify? Do they collectively factor something important that we cant when it comes to certain lines?

I have noticed that after round 3 there can be some massive differences from the bettors on BetFair Exchange compared to DG. For example:

Ras al Khaimah Championship - WIN (Player Name, DG Odds, BF EX ODDS)

|PULKKANEN TAPIO|18.40|16.50|
|SMITH JORDAN|35.00|28.00|
|DETRY THOMAS|39.90|32.00|
|MACINTYRE ROBERT|40.20|28.00|
|VEERMAN JOHANNES|41.20|30.00|

PIF Saudi International - WIN (Player Name, DG Odds, BF EX ODDS)

|ARNAUS ADRI|4.90|5.50|
|SMITH CAMERON|12.10|10.00|
|JOHNSON DUSTIN|24.50|12.50|

AT&T Pebble Beach Pro-Am (Player Name, DG Odds, BF EX ODDS)

|HOGE TOM|6.10|6.60|
|PUTNAM ANDREW|6.39|9.00|
|SPIETH JORDAN|7.42|5.40|
|DAHMEN JOEL|9.02|11.50|
|HOSSLER BEAU|10.20|11.00|
|POWER SEAMUS|14.70|13.50|

I think there are some obvious biases here (Dustin Johnson hard-on) for example, but some that are not so obvious as well.

I think a fun experiment would be to give some small weight to the Exchange odds at close and incorporate them into the DG odds to see if we could produce a more accurate result than we had originally.

I’m not sure how I can get historical odds from Betfair Exchange, last I looked it would cost some money to get which I may just end up doing for fun to back test something like this. I have read a few academic papers that seem to indicate that the wisdom of the crowd can be quite accurate at some things and not very at others.

It could be fun to take a guess at what the punters are ‘modelling’ in their collective hive mind…

Punter 1 - "Wit a name like Putnam, he aint gonna win mate!’
Punter 2 - “Yeaa, I’m PuttinHim in 2nd place be’ind muh man Speiff! HeaHeaHea (Smokers cough/laugh)”

Interested to hear everyone’s thoughts.