How To Avoid The Availability Bias
Why isn’t it a good idea to trust emotion when making a bet? The main reason is the 'availability bias', a bias that shapes your intuitive perception. Are you asking the right questions when you place a bet?
Bad bets are in many cases the result of answering the wrong questions. For this reason we often overestimate the likelihood of certain outcomes. For example, the danger of corner kicks in a football match as well as the likelihood of the favourite winning the match.
1 - What is Availability Bias?
2 - Why You're Asking The Wrong Questions
3 - When Does The Substitution Of Questions Become A Problem?
4 - The Availability Heuristic At Work
5 - How Dangerous Are Corners Really?
6 - How You Can Use Corners To Your Advantage For In-Play Bets
7 - How The Availability Heuristic Works
8 - How The Availability Heuristic Influences Your Betting
9 - How To Exploit The Availability Heuristic In Betting
10 - Conclusion
What Is Availability Bias?
One of the most interesting aspects of our psyche is that we almost always have an answer to everything. There are few subject matters that people truly don't have an opinion on. For instance, if you're asked what you think of Chelsea's playing style or Barack Obama, an answer will readily come to mind. And this applies to anyone, even to people that haven't seen Chelsea play in ages or have no clue about politics whatsoever.
Whether you trust a stranger or not is something you decide within a split second – again you aren't lost for an answer. To put It bluntly, we often have answers to questions we don't fully understand. This is possible because when we're faced with a very difficult question, we tend to subconsciously replace it with a simpler one.
Why You're Asking The Wrong Questions
You can witness a typical example of replacing a difficult question with an easier one when you're buying toothpaste. The difficult question here is:
What toothpaste is the best for my purposes?
However, if you don't happen to be obsessed with toothpaste it isn't unlikely that you will be replacing this rather difficult question with an easier one, which will then in turn serve as the basis of your consumer decision:
Which toothpaste do I happen to know best?
This is precisely why adverts are so effective. When you have to choose between several products, you are far more likely to choose the ones that you are already familiar with, especially if prices are in a similar range.
The substitution of difficult questions with simpler ones has a simple reason. Your brain is trying to function as efficiently as possible. It saves its resources for the truly important decisions. This mechanism usually works quite well and in your favour (for example when you have to decide what toothpaste to pick up), but it can cause major problems as well when you're not aware of this – especially when you're betting.
When Does The Substitution Of Questions Become A Problem?
The most important thing in sports betting is evaluating the betting odds correctly. But we aren't aware of this intuitively, and many punters don't even realise this on an abstract level. When you see betting odds you are in fact confronted with a probability. But the question does Manchester United truly has a 65% chance of winning in a given match isn't easy to answer.
Thus substituting difficult questions for easier ones is a problem because you need to think in terms of probabilities when you bet. But your intuitive mind isn't cut out for that, it tends to think in yes/no and black/white categories. With a little luck there are sometimes a few shades of grey here and there, but that is about it.
The Availability Heuristic At Work
While betting you will tend to substitute questions following this particular pattern:
Difficult question: What's the probability of Manchester United winning the match?
Easier question: How well can you remember their last victories?
Since the original question is difficult to answer, your intuition resorts to the so-called "availability heuristic“. You are answering the easy question of how well you can remember United winning the last few times they played. That in turn makes it possible for you to decide quickly in yes/no terms when confronted with the prospect of a bet on Manchester United, but it also means you aren't assessing the actual probabilities correctly.
Daniel Kahnemann describes the availability heuristic and the associated process in detail in his excellent book Thinking, Fast and Slow.
The availability bias leads to an incorrect assessment of the actual probabilities in other situations as well:
Divorces of Hollywood celebrities receive a lot of attention, which is why you will overestimate the likelihood of such divorces.
Terror attacks are always very prominent in the media – while this lasts we grossly overestimate the dangers that terrorist attacks pose for us, which ironically is what makes them effective in the first place.
We all can remember goals very well that directly followed a corner – which is why we tend to overestimate how dangerous corners really are.
Since it is easy to remember the victories of a particular favourite you will underestimate how likely it is for the underdog to win.
How Dangerous Are Corners Really?
In their really informative book The Numbers Game Chris Anderson and David Sally show that corners aren't necessarily as dangerous as we like to think (starting on page 24) – which may be surprising, as corners are an event that stadium crowds across the world love to celebrate in anticipation.
At first the data (the authors analysed all EPL seasons from 2001/02 until 2010/11) seems to support the classic view, that betting a team with more shots on goal also earns more corners – and vice versa. But a higher amount of corners does not lead to more goals. As for the Bundesliga, Serie A and Primera Division the correlation between corners and goals is essentially zero.
What's truly surprising: Only 20.5% of all corners lead to a shot on goal within three touches of the ball. And only 11% of these shots find their way into the back of the net.
Anderson and Sally conclude that a corner is worth roughly 0.022 goals.
You should however take the conclusions of Anderson and Sally with a grain of salt. For example they failed to consider that not every corner is intended to lead to a goal – a prime example are corners of teams with a narrow lead that look to kill off time towards the end of the match. And it's worth mentioning that some teams are much better at corners than others.
Once you control for these factors there is likely going to be some sort of correlation between corners and goals, albeit much smaller than our intuition would lead us to believe.
How You Can Use Corners To Your Advantage For In-Play Bets
Since the availability bias implies that scoring a goal directly after a corner is going to be overrated by the public, the following live betting strategy is promising: As soon as a team gets a corner, you bet against it; when the "dangerous“ situation has passed you can trade out of your position again at improved odds.
The easiest way to implement this is at betting exchanges such as Betfair, Matchbook or Betdaq. Of course once in a while you will be caught by a goal before you can trade out of your position, but long-term this approach should be profitable. As always: never follow any given strategy blindly, always test everything thoroughly first. This is true especially because some teams are systematically more successful at converting corners than others (you could for example filter for those).
How The Availability Heuristic Works
German psychologist Norbert Schwarz contributed a great deal to help understand how the availability heuristic works. He conducted the following experiment that shows the mechanism neatly:
Exercise for group A:
Describe 6 situations in which you showed your ability to assert yourself.
Assess how well you are able to assert yourself.
Exercise for group B:
Describe 12 situations in which you showed your ability to assert yourself.
Assess how well you are able to assert yourself.
It makes sense to assume that members of group B would think of themselves as especially assertive, but the opposite is true.
Since group A managed to come up with 6 examples much quicker, they concluded that they are indeed quite assertive. For members of group B on the other hand it was considerably harder to come up with 12 examples, just because of the sheer number of examples required. Because it is very difficult towards the end to complete the list, the members of group B ended up thinking of themselves as much less assertive.
What's really interesting is that this experiment also works the other way around. Groups that were asked to name 12 examples of not being assertive, ended up thinking of themselves as being especially assertive.
As Kahnemann describes in Thinking, Fast And Slow, it was possible to reproduce the results of this experiment in a lot of different areas:
People believe they use their bike less often when they are asked to remember many examples instead of a few
...are less convinced of a decision when they have to find more favourable arguments
...are less impressed by a car the more advantages they are asked to list
How The Availability Heuristic Influences Your Betting
The way the availability heuristic works explains neatly how we arrive at intuitive betting decisions. That is why bets on strong favourites are so popular, or bets on teams that are supposedly in “good form”. We substitute the complex question of win probabilities by the simple question of how well we can remember victories.
As a result you are likely to be out in your estimation of the actual probabilities. Which is a huge problem in betting, as successful betting isn't about picking winners, but the right prices. Betting requires you think in terms of probabilities, while your intuition prompts you to think and bet in a yes/no manner.
How To Exploit The Availability Heuristic In Betting
Since the availability heuristic affects everyone, it also influences betting markets. It's something you can witness almost every time Real Madrid and Barcelona play, especially when it's the last big game of the European leagues on a weekend. The odds on these often huge favourites often drop like stones in the final hour before kick-off – it's almost always square money that pressures these prices.
The availability heuristic suggests that it is profitable to go against the grain. The betting odds for relegation candidates, or teams that haven't performed well in recent matches, are regularly way too high – a big part of the reason for that is that it's so hard to recall these teams getting a win.
As a general rule, because of the availability heuristic, we tend to mainly consider very recent information – which is why we have a tendency to quickly detect and construct short term trends. With betting however it is important to think in long-term patterns, and ignore short-term form to a certain degree. Doing this deliberately will give you an edge over the market.
On an intuitive level it helps to write analysis as you can as a bettingexpert tipster. Writing an analysis forces you to think of reasons for your bet. And if you are being very thorough with this, you will quickly realise that losing the bet is certainly an option – which in turn will make it easier for you to think about the bet in terms of probabilities, just like you should.
That may be neither easy nor intuitive, but it's also the only method that will give you the necessary means to succeed.
So in fact, the availability heuristic explains why even hardcore fans don't bet better in “their” sport than their grandmother would. They certainly do know their sport really well, but they are answering the wrong questions.