Related papers: Understanding Betting Strategy
The problem of stock hedging is reconsidered in this paper, where a put option is chosen from a set of available put options to hedge the market risk of a stock. A formula is proposed to determine the probability that the potential loss…
In recent years excessive monetization of football and professionalism among the players has been argued to have affected the quality of the match in different ways. On the one hand, playing football has become a high-income profession and…
We consider how to make probability forecasts of binary labels. Our main mathematical result is that for any continuous gambling strategy used for detecting disagreement between the forecasts and the actual labels, there exists a…
In economy, markets are denoted as efficient when it is impossible to systematically generate profits which outperform the average. In the past years, the concept has been tested in other domains such as the growing sports betting market.…
We give a criterion under which the expected return on a ticket for certain large lotteries is positive. In this circumstance, we use elementary portfolio analysis to show that an optimal investment strategy includes a very small allocation…
Cricket betting is a multi-billion dollar market. Therefore, there is a strong incentive for models that can predict the outcomes of games and beat the odds provided by bookers. The aim of this study was to investigate to what degree it is…
Betting games provide a natural setting to capture how information yields strategic advantage. The Kelly criterion for betting, long a cornerstone of portfolio theory and information theory, admits an interpretation in the limit of…
In a guessing game, players guess the value of a random real number selected using some probability density function. The winner may be determined in various ways; for example, a winner can be a player whose guess is closest in magnitude to…
The recent popularity of Wordle has revived interest in guessing games. We develop a general method for finding optimal strategies for guessing games while avoiding an exhaustive search. Our main contributions are several theorems that…
This note proposes a procedure for enhancing the quality of probabilistic prediction algorithms via betting against their predictions. It is inspired by the success of the conformal test martingales that have been developed recently.
Probability forecasts are intended to account for the uncertainties inherent in forecasting. It is suggested that from an end-user's point of view probability is not necessarily sufficient to reflect uncertainties that are not simply the…
We consider how an agent should update her uncertainty when it is represented by a set $\P$ of probability distributions and the agent observes that a random variable $X$ takes on value $x$, given that the agent makes decisions using the…
We consider how an agent should update her uncertainty when it is represented by a set P of probability distributions and the agent observes that a random variable X takes on value x, given that the agent makes decisions using the minimax…
Ranking is used in sport leagues to determine a champion and/or to decide on promotion/relegation of teams. Arguably, the best known ranking method relies on scores obtained by cumulating the points associated with the wins and the draws of…
This paper explores the significant history of professional football and the betting industry, tracing its evolution from clandestine beginnings to a lucrative multi-million-pound enterprise. Initiated by the legalization of gambling in…
In the game of cricket, the result of coin toss is assumed to be one of the determinants of match outcome. The decision to bat first after winning the toss is often taken to make the best use of superior pitch conditions and set a big…
According to recent empirical studies, the group draw of major sports tournaments can imply a high level of uncertainty, and some lucky teams enjoy an unfair advantage over the other teams. We propose a novel technique to quantify this draw…
Conventional noncooperative game theory hypothesizes that the joint strategy of a set of players in a game must satisfy an "equilibrium concept". All other joint strategies are considered impossible; the only issue is what equilibrium…
When testing a statistical hypothesis, is it legitimate to deliberate on the basis of initial data about whether and how to collect further data? Game-theoretic probability's fundamental principle for testing by betting says yes, provided…
In this paper, we consider one aspect of the problem of applying decision theory to the design of agents that learn how to make decisions under uncertainty. This aspect concerns how an agent can estimate probabilities for the possible…