This is an online tool to help predict the most profitable bets on the winner of the FIFA World Cup 2010 (soccer). It uses Markov Chain Monte Carlo statistical methods to simulate tens of thousands of tournaments, using expert-provided pairwise game score estimates, and then calculates the expected payoffs of bets based on current odds.Description
MCMC works by leveraging simple single-event probabilities, that you can easily estimate, into long-range predictions involving many interactions. There's no magic involved. It's basically a way of estimating the probabilities of complex multi-step outcomes through brute force simulation.
In the case of the World Cup, this amounts to simulating complete tournaments by playing each game from round one through the final, choosing winners based on simple pairwise expectations of how the teams pair up against each other.
The pairwise match-up probabilities are the key to being able to simulate entire tournaments autonomously, and must be provided by an expert or from records of previously played games. You can create your own pairwise estimations using WCP'10 or use one of the probability estimation tables generated by an expert.
Obviously, the accuracy of this pairwise match-up table is critical to getting good results from the Tournament Simulator. The key to the power of MCMC methods is that they let you convert simple known (or relatively easily estimable) probabilities, and by simulating full sequences of outcomes over and over again, arrive at an estimate of the probabilities of different long-term highly-interactive final outcomes.
You can read more about the statistical methods involved on the wcp page: http://www.donationcoder.com/wcpHistory
This tool was originally written for the 2006 world cup, and DC member Crono
was instrumental in helping me code it.
It is borderline inappropriate for NANY since it is not a complete rewrite -- but I am hoping it will be ok with everyone to submit it because it is a whole new tournament event.ScreencastScreenshots
From the 2006 tournament: