How do bookmakers establish odds if sports events are unpredictable, considering the multitude of factors at play that prevent precise probability estimation?
In: Mathematics
There’s 2 ways.
One they use statistical analysis to determine a probability and then fudge the numbers a bit in their direction.
The other way to do it is let’s say you have a sport where you’re only betting on a binary outcome (eagles beat the cowboys or vice versa) you have 1000 betters in the pot betting equally, winners split the pot evenly. If 800 people pick the cowboys then the eagles are 5:1 underdogs (cause if you put in 1 dollar and win you’re getting 5)
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