Does a soccer team playing well have a better chance of winning?
A study of mine a few years ago found an unexpected result: even after a starting pitcher gives up three or more runs in the first inning, he returns to form for the rest of the game, pitching to the level of his overall ability. From just the first inning, you’d expect that he doesn’t have his stuff that day, and that he’d continue to pitch poorly, but he doesn’t. Just because the opposition dominates him for a short period doesn’t mean they will continue to dominate him. In effect, this kind of in-game “momentum” does not exist.
Is the same true in soccer?
I would argue that the answer is yes – based on a closer look at the data in a recent economics study by Ricard Gil and Steven Levitt.
(Levitt is the co-author of the bestselling book Freakonomics (my review), and it was through an entry on his blog that I learned of his study.)
The paper looked at data from the online gambling site intrade.com. Intrade allows bettors to make bets with each other even while the game is on. The odds, of course, will change as events unfold in the game, and are determined by supply and demand, like prices in the stock market.
Gil and Levitt found that the betting market is very efficient, in the following ways:
- When a goal was scored, the price of a bet on the winning team increased immediately;
- Even in retrospect, it would have been difficult, to the point of nearly impossible, to profit by following any specific betting strategy;
- When a mathematical opportunity arose for making a certain profit (for instance, better-than-even odds of team A winning combined with better-than-even odds of team A not winning), alert bettors seized the opportunity in less than fifteen seconds;
- And market makers, who offer to take both sides of the bet at different odds hoping to make money on the difference, actually lost money overall, as sophisticated bettors took advantage of mispriced bets.
All this suggests that the intrade market correctly captures the chances of winning at any given time.
Which brings us back to the momentum issue.
In their chart on page 19, Gil and Levitt show that the intrade odds, and therefore the game probabilities, are constant in the fifteen minutes before a goal is scored.
Now, in any game, one team will be playing better than the other, even dominating the game. You would expect it to be that team that eventually scores the goal. But even though bettors are watching the game and can see which team is playing better, they did not bid up the odds of the dominating team winning before the goal was scored!
That is, suppose team A and team B initially have equal odds of winning. Team A comes out flying in the first half, dominating the play and getting several good shots on goal. After 15 minutes, they finally score a goal, making it 1-0. When they score, the odds immediately adjust. But in the 15 minutes preceding the goal, while team A was dominating, its odds did not change. You could have bet A at the same odds as before the game even started.
This very strongly suggests that dominating the play does not tell us anything about the chances of eventual victory. It means that domination is “random,” that either team may dominate at any time, and that teams dominating one minute are equally likely to be dominated the next.
Put another way: if you can’t predict the next fifteen minutes from the previous fifteen minutes, it means that teams don’t appear to have “on days” and “off days.” They just play to the level of their ability, and the appearance of domination is, like the “hot hand” in basketball, simply an illusion.
I’m surprised by this. But I’m even more impressed that bettors on intrade already knew it. The workings of markets are truly amazing.