Most people recognize that professional sports bettors have to be proficient at math and managing money. However, understanding basic human psychology is also a valuable tool when handicapping games. I’m not talking about psychological motivation from players like revenge angles or contract incentives, either.
Understanding how humans think and act emotionally can help handicappers be aware of their own biases and read the market better, especially when the market moves because the public is thinking irrationally.
Below are some psychological principals to consider when reading the market and handicapping games.
Recency Bias and Public Amnesia
Outside of sports, recency bias is defined as, “A cognitive error that favors recent events over historic ones.” When a team plays poorly in recent games, especially when it’s nationally televised, the public tends to overreact (“They suck”) and discount prior success. Likewise, when a mediocre team puts on a good recent performance, the public will overlook that team’s historical concerns.
It’s important to note, that historical patterns aren’t necessarily superior to recent performances. Fading a struggling team or riding the hot hand can be profitable. However, it’s important to ask yourself, “Am I guilty of recency bias?” before placing your bets.
The Philadelphia Eagles’ 38-7 win over the Giants in the Divisional Round of this past NFL Playoffs is a great example of recency bias. In the Free Pick section of our website I had written, “The public is in love with the Giants, but don’t be a prisoner of the moment and always beware of recency bias.”
The Eagles opened the game as 7-point favorites and 70 percent of bettors took the Giants against the spread. Knowing what we knew about both teams, we can see how illogical and irrational these bets were. People forgot how dominant the Eagles were all season because they had a week off (and looked vulnerable to finish the regular season), while the Giants looked good beating the Vikings in the Wildcard Round. People talked all season about how the Giants weren’t as good as their record indicated and one upset vs. the Minnesota Paper Tigers gave bettors amnesia.
Cognitive Dissonance Theory – Huh?
Nerd alert. Outside of sports, cognitive dissonance theory suggests humans have an inner drive to keep our attitudes and beliefs (and behaviors) in harmony and avoid disharmony (dissonance). When there is disharmony, humans take steps (sometimes irrational) to remove the dissonance.
In life, this happens when someone you care about does something bad or immoral – it causes dissonance and sometimes the gut reaction is to make excuses for them. Or maybe your least favorite politician donates money to charity and does something positive, we may discount the positive behavior by saying they probably had ulterior motives.
Most sports fans have an inflated belief about their own team being superior to others. When negative information is presented to us about our team (creating dissonance) we are often quick to defend our team. This partially explains why so many novice bettors have blind spots and lose money betting on their favorite team.
Something similar can happen while handicapping a game too. If your data, trends, etc. paint a picture that Team A is going to win and late in the process you realize there is strong data for Team B, bettors need to be open-minded about that data even though it doesn’t fit the rest of your beliefs and attitudes about the game.
While the Tampa Bay Buccaneers limped through the regular season, they were still a popular team among many bettors who repeatedly lost money on them. Perhaps the belief that Tom Brady was the GOAT kept bettors hanging on to Tampa Bay a little too long.
People Love to Bet Favorites and OVERs
It’s useful to know that the public prefers to bet on favorites and OVERs. You can call it psychology or human nature, but it’s undeniable that the public has clear tendencies here. People prefer to root for points rather than a running clock.
I used this line of thinking while suggesting you bet OVER 49.5 for this last Super Bowl (LVII) on twitter @pm_bestbets. In a game heavily bet by the public, with two respected quarterbacks, professionals could anticipate the market would force the total higher. The total went through 51 points and the game finished with a whopping 73 points. We created Closing Line Value (CLV) by anticipating the psychological tendencies of the public. While it wasn’t the reason we won the bet in that case, consistently getting CLV is very helpful over time.
Luckily, Prediction Machine‘s model is unhindered by human emotions and removes these biases from its process for providing recommendations. Start your free trial today.