Sorry for debating multiple points at the same time but that's kinda the road we're going down so let's do it.
There is nothing wrong with that. The issue for me lies in the way you are using your WE. You are comparing WE (not a probability) to Pinny's implied odds (which ARE a probability if you back out the vig). Another way to put it is that your WE is the win expectation against a random team, while Pinny's odds are a reflection of the win expectation against the specific team that they're actually playing against. It's an apples to oranges comparison. I think you note this in your response to PLP as a limitation of your method, but to me it seems like a pretty big deal - something that could take an otherwise good model and make it give bad results. But your results have been great so maybe I'm wrong about this.Steamsharp wrote: no Win Expectation is not win probability, by definition probability is defined through a probability distribution which is normalized. win expectations are not normalized and you might notice that sometimes they add up to greater then 100%. This is by intention because we are only interested in the number of random performances [consider a statistical set aka boxscore a performance] that a home team for instance might beat an away team from a vast cohort of known performances.
I strongly disagree with both of these points.Steamsharp wrote: Pinnacle often is forced to over juice teams like oakland (the 1.334 i was talking about) because the public over 12-14 hours is dropping 98% of the liquidity on the ML. in this case we hammer the underdog because of the "black swan" affect which looks a lot like PLP's superb RL/O bets on teams like MIA or NYM at 5-1.
If the heavy favourites are "juiced" because of public action, then A) there would be a clear pattern of favs becoming heavier throughout the day, and B) enough sharps would take advantage of this pattern to return the odds to equilibrium.
I am very familiar with N.N.Taleb and have read most of his stuff. I even spent big $$$ to store my baby's umbilical cord stem cells because that is the "antifragile" thing to do. There are NO black swans (or at least extremely few of them) in baseball. To use Taleb's terminology, baseball is a game that is rooted firmly in Mediocristan. Pretty much anything that can happen on a baseball field has happened at some point in the past. Black swans are events that are not accounted for in models because they have never happened before. A heavy underdog scoring 7 runs is NOT a black swan - it's happened hundreds of times before. I think you are confusing the concept of black swans with simple variance.
I disagree with this too. If the Dodgers played against Houston 162 times a year and if they got to send Kershaw to the mound 162 times against Houston's #5 starter 162 times, it's likely that the Dodgers would win far more than 100 games. So it's quite possible that a team could have >62.5% win probability in one particular game with one particular starter vs one particular opponent.Steamsharp wrote: but very very rarely. baseball teams at best win 100 games on the season which to me says anything above 62.5% implied Wper to BE is suspect at best.
Just send me the scotch in the mailSteamsharp wrote: this in my opinion is false. (please take with a grain of salt) the problem is that people magically think pinnacle is the true win probability to break even when they post lines. I can show you a direct proof by contradiction that this is just false.
I don't know what others think but by being on the other side (seeing how books servers work), I know the books are just reacting to liquidity and trying to heap up bets which have negative win expectancy so that sharp money is rendered ineffective and they will either win a crapload of money when the fave loses or payout next to nothing when they win due to hedges and smart pricing. they know the true WP as well as anyone and the closing lines are almost always not that. (at least we have deluded ourselves into believing that and we will gladly open a bottle of 25yr McClellan's with you in Van if you drop by to debate it)
There is nothing in my question that requires the assumption that Pinnacle's lines are efficient.
Suppose that you (based on your own models and analysis, not Pinnacle) determine that both teams have the same win expectancy. You have the choice to bet the visiting team at -104 or bet the home team at -104. You bet every game, so you have to pick one or the other. Which one do you choose and why?
Thanks again for the debate, looking forward to your responses