Ping degenerates / game theorists - intriguing gambling situation

[QuikSand]

While I don't personally embrace the term "degenerate gambler," I do seem to find myself in these situations more than the average bear. Take that for what it's worth.

Anyway... an interesting situation sits before me. I am looking for input/advice, but also just floating this out there because I think it's really intriguing.

The Setup

I played in a winner-take-all college football bowl pickem contest (that I did not set up). The stakes are enough to be concerned about. Setup is just pick the winners of each bowl game, no point spread, no confidence -- just 1 point per correct winner.

Fast forward to several days ago. I found myself, despite many embarrassingly wrong picks, tied for the lead with 8-9 games yet to play. So, I started watching more closely. This is hosted on ESPN, and they allow you to alter your picks up until the game starts (this is important).

Through the last several days, I got conservative and went mostly chalk. So did my co-leader. As we pulled away from the pack, it became clear this is a runaway - one of us will win it all. That's good. Anyway - we both picked several winners in a row (favorites had won the last several games up until lats night).

I circled Southern Cal as my place to break ranks. On ESPN, the picks were 60/40 for Penn State, I decided this would be my chance to pick against a favorite, hopefully pick up a game lead. Amidst great drama, obviously, it worked -- the other guy picked PSU, I squeaked out the win, and now have a one-game lead with only one game left to play.

The Quandary

So, the game reset is:
-I'm ahead by one game overall, with one to play where there's a fairly heavy favorite
-We each could change our picks for the NC game anytime
-Our picks remain secret until kickoff
-If the overall result is a tie in correct picks, the tiebreaker is the final score of the NC game

So, the obvious play for me is to pick Alabama, by whatever score, and if they win, I win the prize.

Obviously.



Except, my rival knows that's the obvious play for me to make.

My rival is a degenerate and fairly sharp. Given a week to stew on it, it seems quite likely to me that he will react to this situation using standard Jeopardy! theory, and recognize that his path to win is to pick Clemson.

Now, for the moment, I am assuming that I can pick Alabama, but submit a score prediction favoring Clemson... meaning that in the event of a Clemson win, we'd be something like 50/50 on taking the prize. So, my chances are good there... maybe 85-90% winner. 87.5% if we assume the bet on the final score is a pure tossup.



So... what if I'm pretty convinced that he will pick Clemson. It's his obvious play, right?

How about I pick Clemson, too? And I put in a Alabama-wins score prediction?

If he picked Clemson, I win 100%, he cannot make up the game differential.

If he picked Alabama, I win in the 25% chance that Clemson wins the game, and then I win something like half of the other 75% if my score prediction is better. So, we could make that 62.5% chance of winning... I'm still pretty solid.

So, if x is the likelihood of him picking Clemson, then my chances of winning the contest are (assuming we split on the score prediction 50/50):

x + (1-x)*(.625)

In this setup, it call comes down to how likely is it that he makes the obvious pick-the-underdog selection... x.

90%... then my Clemson pick wins over 96% of the time
50%... then my Clemson pick wins about 81% of the time


Fun game theory, right?

[Arles]

Whether you go Alabama or Clemson, you are correct in that the smart play is to pick your losing team in the score prediction. The rest is which situation you can live with better:

A. You try to be sneaky and pick Clemson (but with the Alabama score). He picks Alabama, they win and his score is closer.

B. You pick Alabama and have Clemson winning the score. He goes the logical route, picks Clemson, they win and his score is closer.

If it were me, I'd go option B. Alabama is roughly a winner 65% off the time by the numbers. So, to lose, you'd need the 35% upset + your opponent to pick Clemson + his score to be closer. I could live with those odds.

[NobodyHere]

WWJBMD (What would JBMagic do)

[panerd]

Pick Alabama and then on the side put 1/2 the value of the pool on Clemson +7. You run a fantastic possibility of middling and winning 1.5 times the pool, most likely win the pool, and worst case guarantee 1/2 the pool amount.

[QuikSand]

Originally Posted by panerd

Pick Alabama and then on the side put 1/2 the value of the pool on Clemson +7. You run a fantastic possibility of middling and winning 1.5 times the pool, most likely win the pool, and worst case guarantee 1/2 the pool amount.

I am definitely considering hedge options as well, this among them.

[QuikSand]

BTW, I have confirmed that I can submit contradictory picks... i.e. Alabama to win but in the tiebreaker Clemson 24-20.

[albionmoonlight]

Boring approach:

Ask him if he will agree to a 90/10 split of the pot before the games are played.

[Logan]

You have a typo in your subject line. Should probably be more careful next time.

[Umbrella]

I would take Bama in the pool, and then make a straight up side bet for Clemson (assuming it is legal where you live ). The money line is anywhere around +200 to +250 right now. You could do the math to determine what bet to make to ensure you come out ahead no matter what.

[QuikSand]

Originally Posted by Logan

You have a typo in your subject line. Should probably be more careful next time.

Remedied. Dreadfully sorry.

[stevew]

Originally Posted by albionmoonlight

Boring approach:

Ask him if he will agree to a 90/10 split of the pot before the games are played.

This was my thought as well.

[murrayyyyy]

Originally Posted by panerd

Pick Alabama and then on the side put 1/2 the value of the pool on Clemson +7. You run a fantastic possibility of middling and winning 1.5 times the pool, most likely win the pool, and worst case guarantee 1/2 the pool amount.

Not the worst case. In this situation you middle by taking Clemson on the money line (you can find +200 to +210 online). Without knowing any of those other values I'd go with this formula.

(champ prize) - X = (Clemson ML value * X) - (Entry Fee) or
hedge bet = (champ prize+entry fee)/(decimal of money line+1)
hedge = (champ prize+entry fee)/(3) {assuming you can get Clemson ML +200}

So let's say entry fee was $100 and the champs pay is $2500

The hedge should be $866.66 I believe in the above scenario. A lot of how I would play this depends on how much that prize pool is. I'm a greedy gambler and would almost turn in Clemson and root for a double win of the prize pool (as I think he goes Clemson thinking it's his only shot) and the bet. Or you can play it safe and make the bet above and pick Bama. If Bama wins you get the prize pool but lose the hedge bet.

I'd say it also depends on how much you want to walk away with. You could just simply hedge the Clemson ML value (+200) and place a bet for the entry fee. This way you walk away with 2*entry fee at the least. The more you bet on the middle, the more you take from the prize for winning (unless you get that sexy Clemson wins and you win the pool also).

[jbergey22]

Is this opponent sharp enough to realize that you could possibly block him off by taking Clemson as well? Do you know him? Does he have way of knowing what your pick may be?

Could you pass some 2nd hand information to him about how you think Alabama is going to destroy Clemson and then take Clemson?

Is any case it is a tricky situation. Safest play is to just take Alabama and see how it unfolds. If you can manipulate thew situation and feel 99 percent confident he is taking Clemson block him for the win.

[Logan]

Originally Posted by QuikSand

Remedied. Dreadfully sorry.

Thank you.

(I'll never forgive and forget)

[nol]

Bet Alabama. If they lose bet twice as much on Alabama to win next year's national title.

[QuikSand]

Originally Posted by Arles

...which situation you can live with better:

A. You try to be sneaky and pick Clemson (but with the Alabama score). He picks Alabama, they win and his score is closer.

B. You pick Alabama and have Clemson winning the score. He goes the logical route, picks Clemson, they win and his score is closer.

Along with this, there are two psychological factors at work.

#1...losing this by being "too cute" (i.e. picking Clemson) could be a substantial shaming incident among people I know personally.

#2...anticipating myself in a situation where I actually have to root for Clemson is enough to give me shivers and nausea.

Both of these factor point toward sticking with Bama, and then deciding on my own whether to do a simple hedge or something more complicated like discussed above.

[Gaelic Hill]

If you gear yourself toward guessing his pick, I think you essentially lose the advantage of being ahead. If you assume his pick is 50-50, then you picking Alabama gives you a 93.75% chance to win, and Clemson gives you 81.25%, assuming the predicted score thingy is a toss-up.

As far as hedging, if you plan on making other wagers the rest of your lifetime, then forget about it. It drives me crazy when people say that winners walk away from the table when they're ahead. Whether you come back to the table in 5 minutes or 20 years, you are still just picking up where you left off.

[Dreghorn2]

Originally Posted by nol

Bet Alabama. If they lose bet twice as much on Alabama to win next year's national title.

LOL, well played.

[QuikSand]

Originally Posted by Gaelic Hill

As far as hedging, if you plan on making other wagers the rest of your lifetime, then forget about it. It drives me crazy when people say that winners walk away from the table when they're ahead. Whether you come back to the table in 5 minutes or 20 years, you are still just picking up where you left off.

I agree with this in spirit, and apply it at the poker table with regularity.

Here, the difference is that the implied "bet" on Alabama (if I end up there) is of a magnitude that I would not feel comfortable with overall. So yes, I will gamble again. The purpose of the hedge would not be to lock in some self-satisfaction by using arbitrary boundaries of timing - it's to bring my single-game risk down to the levels of my overall tolerance.

[TCY Junkie]

One of the worst feelings is taking a team you don't think will win, thinking he will go with the other team so he has a chance so you try to match him. Then the game happens and he has the team you like and it wins. I haven't bet on sports since 3 weeks after pinnacle closed to US bettors, not having access to 4 percent takeout just ruined it for me so I quit after winning the 6 years I played. Definitely been in some different type of gambling situations. For instance the week after pinnacle sports closed to US bettors NE was up big at halftime to colts. All year I put about 5 percent of my profit on NE to win superbowl, was going to get back over 7k. for a guy that bet 20 to 50 a game usually that was a lot of effort I put in. At halftime I saw what the odds on pinnacle were for colts to win and decided to put few hundred on them when it popped up on my new site. The new site I signed up for didn't offer colts winning as an offer. I bet a tiny bit on super bowl then cashed out... I should be able to get 4 percent juice but not free to do so. So I just walked away from it.

[Arles]

Originally Posted by QuikSand

Along with this, there are two psychological factors at work.

#1...losing this by being "too cute" (i.e. picking Clemson) could be a substantial shaming incident among people I know personally.

#2...anticipating myself in a situation where I actually have to root for Clemson is enough to give me shivers and nausea.

Both of these factor point toward sticking with Bama, and then deciding on my own whether to do a simple hedge or something more complicated like discussed above.

Yeah, I think a small % on the Clemson moneyline is the best hedge. Clemson is at +230 on my offshore, so even a 20% hedge on the ML puts you in a can't lose situation. Plus, you have a legit chance where Clemson wins, you pick the closer score (or he also picks Alabama) and win both bets

[panerd]

Originally Posted by Arles

Yeah, I think a small % on the Clemson moneyline is the best hedge. Clemson is at +230 on my offshore, so even a 20% hedge on the ML puts you in a can't lose situation. Plus, you have a legit chance where Clemson wins, you pick the closer score (or he also picks Alabama) and win both bets

Agree but I think the better hedge is Clemson +7. The opportunity to hit everything is always the best hedge win.

[Gaelic Hill]

Originally Posted by QuikSand

My rival is a degenerate and fairly sharp.
So... what if I'm pretty convinced that he will pick Clemson. It's his obvious play, right?

If he is sharp, and you are sharp, won't he anticipate your logic? If so, he picks Alabama and then, with Bama the favorite, you will likely need the tiebreaker to win. The one thing you know for sure is that his tiebreak will be the SAME team he picks to win, and since a tie means that your team lost (obviously), you MUST do the tiebreaker for the team you pick to LOSE to have any chance in a tie. This isn't a cute play, you have to do it.

[albionmoonlight]

Originally Posted by Gaelic Hill

If he is sharp, and you are sharp, won't he anticipate your logic?

You will pick Bama, so he has to pick Clemson
But you know he has to pick Clemson, so you pick Clemson
But he knows that you know, so he will pick Bama
But you know that he knows that you know . . .

So, since who knows what a sharp opponent will do, I think that you need to take him out of the equation, pick whatever team you think is actually more likely to win, and use one or more of the hedges discussed above.

[Arles]

[QuikSand]

Originally Posted by Gaelic Hill

...you MUST do the tiebreaker for the team you pick to LOSE to have any chance in a tie. This isn't a cute play, you have to do it.

Right, that's why it was built into my setup in the first post. At the time I wasn't certain that would be considered a legal entry, I have since confirmed that it is. So, it's already baked into my thinking.

At the moment, I am making book (effectively with no vig) among some friends as my hedge, rather that placing it somewhere at -110. I'm planning to pick 'Bama in the contest, favor Clemson in my score prediction, and then lay off a fair amount of my interest by banking some money line bets. I will leave myself a larger winner with a 'Bama win, but will lock up a sizable chunk in hedges.

For old time's sake, I'll likely keep 2/3 of my interest in 'Bama.

[cartman]

Just keep in mind that you didn't start the (gambling) fire. It was always burning since the world's been turning.

[panerd]

I've read enough gambling stuff from you over the years to know that you aren't typically a low stakes $10-20 guy. You really have me intrigued on the size of this pot.

[QuikSand]

We are comfortably into Pappy territory.

[Gaelic Hill]

Originally Posted by cartman

Just keep in mind that you didn't start the (gambling) fire. It was always burning since the world's been turning.

My #2 all-time fave artist, just below the mop squad from Liverpool. Honorable mention to Jack White.

(I guess I'm being off-topic within an off-topic.)

[Julio Riddols]

Pick Bama, predict a tie.

[korme]

This thread makes me wonder why we don't have a continous sports gambling thread. I'd love to hear everyone's opinions/best bets/plays for this NFL weekend, for instance.

[korme]

Originally Posted by QuikSand

We are comfortably into Pappy territory.

$3k?

[sooner333]

The tiebreak rules do not preclude an entrant from winning the tiebreak if the wrong team is selected to win--it is based on the sum of the point differentials for each team.

[larrymcg421]

Originally Posted by Julio Riddols

Pick Bama, predict a tie.

I think this would be a bad idea. If the other guy does pick Clemson, my guess is he will pick it by a close score, since that seems the most likely way for Clemson to win. Quik risks getting shut out of the tiebreak if he picks a tie and the other guy goes +1. I would actually bet the high here, something like a +4 or +5.

If the guy picks a low amount as expected, then Quik has cornered his opponent in a narrow three point range of outcomes. If the guy randomly goes high, then Quik is still in a good spot, covering the most likely Clemson win outcomes.

[QuikSand]

There's virtually no point in predicting a tie... right now I am (for the tiebreaker) predicting a Clemson win by 4. The only way I'm better off with a tie prediction is if they win by exactly 1. And I only lose in that situation if my opponent picks Clemson to win and picks them by 0-1-2-3 (which makes no sense for him).

I'm wavering on dropping my pick to a 3 point margin, though. The likely situation is that we "middle" this somehow, and he picks a higher number than I do. (e.g. he picks CU by 7, I pick them by 4, and the split end up being 5.5) The advantage of playing a slightly higher number is the chance to own ALL of the outcomes greater than that margin.

[kingfc22]

So did he end up going Clemson?

[QuikSand]

I stayed with Bama to win, then Clemson by 4.

He has Clemson to win, but I cannot view his score prediction.

Ugh...really wanted to win the psych game.

[SackAttack]

Originally Posted by QuikSand

I stayed with Bama to win, then Clemson by 4.

He has Clemson to win, but I cannot view his score prediction.

Ugh...really wanted to win the psych game.

nice call on the tiebreaker, though.

[PilotMan]

No kidding.

[Fidatelo]

So did you hedge on Clemson and win both bets?

[Maple Leafs]

Really need to find out whether the other guy had Clemson by 4 as well.

Might honestly be more interested in this than in the actual game.

[albionmoonlight]

Originally Posted by Maple Leafs

Might honestly be more interested in this than in the actual game.

I know. With 18,000 different feeds last night, ESPN couldn't be bothered to dedicate one of them to Quik's gambling pool?

[QuikSand]

The other guy picked Clemson 34-30 and won the pool based on being closer by point differential. I had Clemson 24-20.

Honestly... consider this. About 4 minutes left to play, and it's Alabama up 24-21. Think through... the only way he wins is that Clemson wins outright, AND the totals have to get up past 29-25. I can survive the Clemson take-the-lead score. I can survive Alabama retaking the lead, obviously. But then I'm at risk from a third score. It pretty much comes down to three touchdowns in the last 4 minutes. That decision tree is full of very reasonable off-ramps that have me winning, at every stage.

But in the way the game was amazing to watch and enjoy, it was also amazing in its absolute determined precision to screw me out of my money.

[murrayyyyy]

So will you reveal the entry fee and pot size now? Gambler in me wants to know what the hedge would have been.

[Vince, Pt. II]

That is brutal.

[Fidatelo]

Oh man sorry to hear that QuikSand, that sucks

[Umbrella]

Did you end up hedging?

[QuikSand]

I hedged some, but the differential was still pretty substantial.

[Maple Leafs]

I am a.) devastated by this news and yet also b.) willing to pay $100 for footage of you the moment you found out he nailed the prediction.