probabilities generation

[seldon]

Hello boys!,

I'm trying to write some computer code to compute reliable probabilities for soccer matches, in particular I'm interested in the probabilities of the 1, X, 2 for a given match.
So, for each match I obtain something like:

milan-inter: 1: 0.3 X: 0.3 2: 0.4

Now I want to understand if my probability generator is good. The way I do it is the following: I consider the probabilities of the true result (the one that actually came out) for all the matches the generator worked on. Then I take the geometric mean of these numbers (the so-called likelyhood). This is an estimator for the goodness of the generator.

Obviously, for the most stupid generator the predictions are:

milan-inter: 1: 0.333 X: 0.333 2: 0.333

and the performance of the generator (the geometric mean...) is 0.333.
A perfect generator would always guess the true outcome and so its
performance would be 1. So the performance is a number between 0.333 and 1.

Now, testing some simple ideas to generate the probabilities, I obtained a performance of something like 0,36 that seems a poor one.

My question is:
-what can be the performance for a very good generator (like a human been)?
-what are the estimators commonly used for the goodness for a probability generator ?
-how do the best generators work?
-are they human or are they computer programs?
-how do the betting corporations compute their probabilities (and odds)?
-how do they perform?

Thank you for your attention and time!

[Bugs]

I can't provide answers to all of your questions, but I do know that if you can predict two-way bets (like Asian handicap bets) correct 57-58% of the time, you can make a very good living as a full time bettor.

Picking at random will give you 50% correct predictions for two-way bets. Increase your hit rate to above 55%, and you can start thinking about quitting your day job. So we're not talking about an extreme edge here, only a few percent better than random picking. But it's damn hard to do, and certainly no computer algorithm has ever been close to achieving this.

Bugs

[seldon]

Ok, you mean that when the profit margin of the bookie is about 10% you have to be sure that the probability of the asian handicap event you bet on is greater than 55% to make money.

Yes, I think that before betting (if you want to bet for profit and not for passion) you must be sure to have better probabilities than the bookie and this can be granted only after an appropriate historical analysis.

I actually dont understand the reason why everybody is more concerned with money management while the most important topic of probability estimation is someway neglected. Without an advantadge on the probabilities any money management method on the long run goes into bankrupt, while with good probabilities any money management method (excluding the most stupid ones like betting everything on one single event) produces good results.

I have just started to study these kind of problems and I'm currently analysing the opportunities offered by italian totocalcio. Is there anybody how spent some time on it and developed some opinion? Does anybody knows where I can find old odds for italian series C1 and C2? (old means 2003). Thank you all.