How many times have you decided to ask two or more people for their advice when you have had a problem? The majority of people will seek out advice from multiple sources whenever they encounter a problem in order to do their absolute best to consider all possible options. This is widely known as the “wisdom of the crowd”. Sometimes the majority of the group of people approached provides the same answer, which can lead to the person feeling more confident that they have found the perfect solution. Similar to the real world this strategy is often used by sports bettors that are attempting to consider all angles. So what happens when the group is wrong? Here is a look at what happens when sports betting crowds act like herds.
Understanding The Crowd Philosophy
The wisdom of the crowds philosophy was first observed by an anthropologist named Sir Francis Galton in the early 20th century. When at a livestock fair, he observed a competition to guess the weight of a butchered ox. While nobody was able to correctly guess the weight of the ox, Galton calculated the median of guesses as being within 0.8% of the answer. He found that the “middlemost estimate expressed the vox populi, every other estimate being condemned as too low or too high by a majority of the voters”. This same concept can be applied to a variety of aspects of decision-making. James Surowiecki wrote a book in 2004 that outlined the navy’s search for a wrecked submarine called the USS Scorpion. In its search efforts, the navy was only able to locate the wreck to within a 20-mile range. In a test of collective wisdom, a navel officer named Dr. John Craven gained individual insights from a wide and varied group of experts and used their information to pinpoint a location that turned out to be 220 yards from the actual wreck. While none of the experts was right on, the averages collected from the crowd that Craven asked for help provided the perfect location for which to find the submarine.
Applying The Crowd Philosophy To Sports Betting
The wisdom of the crowd works by averaging estimates from a wide variety of people. Some participants will overestimate a situation while others will underestimate it, which can leave the average of their predictions close to perfect. While the sports bettors can use the numbers to help make their predictions, the sportsbooks are doing the same thing with adjusting their lines. The sportsbooks will consider the information they receive taking bets on a game and adjust their lines accordingly. This helps to drive the lines to an appropriate margin. Sports bettors will often give the sportsbooks credit when they reflect on how close the line is for a game without realizing that the wisdom of the crowd actually helped shape it quite a bit.
While the wisdom of the crowd could help push the lines close the actual outcome of the game, it can also have a negative impact if the crowd is somehow off with their predictions. For example, if the Dallas Cowboys are a 4.5-point favorite against the New York Giants and a large amount of fans bet on Dallas, the line could actually shift to 5.5. That could lead to more Cowboys’ fans betting on Dallas and therefore a disparity in the number of bets received. However, if the Giants are the better bet than the wisdom of the crowd could actually work against those paying attention to the lines if they bet on the Cowboys. It’s important to pay attention to how the wisdom of the crowds can have a substantial impact on the betting odds, just make sure you aren’t overestimating their ability and constantly betting on the wrong side as a result.