Chaos & Complexity

Regular readers will remember the narrative of the air-crash investigator. The story that might have been made up, or, at least, borrowed from someone else.  Appropriated or not, the story contains a valuable lesson for punters. Life is complex and chaotic. Predicting the likely outcome of sporting events is difficult.


Chaos Theory

Chaos theory has a long history, but entered the public consciousness because of Edward Lorenz’s 1972 paper exploring the “butterfly effect”, or how a butterfly flapping its wings in Brazil might cause a tornado in Texas weeks later.

Chaos theory recognises that not everything is straightforward and so cannot be explained in a simple cause-and-effect way. In many things that we try to predict, or even explain after the event, we search for uncomplicated answers. As that air-crash investigator did (or didn’t) tell me, after a plane accident, we want one easily identifiable culprit. One reason, or one person, to blame. We are cognitively drawn to answers that give us that certainty and are dissatisfied when we don’t get them.

What Lorenz demonstrated, though, was that in complex systems, like the weather, where there are multiple interacting influences, even a minuscule change in an initial condition can create a wildly different outcome to that which might have been expected. This makes prediction difficult. It’s hard enough to model possible future scenarios when dealing with something as complex as the weather, but this is made harder when you know that even a small inaccuracy, or rounding, in your initial data, can have dramatic influences on future events.


Horse racing is chaos

This applies to punting too. Take a horse race. In our predictions, we assume that all horses start at the same time and point. They don’t, though.  In this race, one horse, a front runner, rocks back as the gates open and misses the break. Another horse takes the lead. The horse that usually front-runs rushes through the field, impeding other horses on route, and locks-up in a duel with the lead horse.

The pace of the field increases, with the impeded horses accelerating to regain their position in the now faster-moving field. The front-runners tire quickly, other horses get trapped behind them. Another horse shies away from the whip and moves off a straight line. A long-shot, who also missed the break, and consequently ran a more even-paced race, is slowing less quickly than other horses and runs through a newly-created gap on the rails. You get the idea.

This story, of course, is still largely linear, with one thing causing another. It doesn’t do justice to the chaotic interdependency of the average race but it illustrates why, as punters, we need to guard against overly-simplistic predictions of what will happen in the events we bet on. Especially as we also need to recognise the impact that human decisions can have on an already complex system.



The track bias assumption

Take track biases. If there is a perception that holding a certain position in running is advantageous at a particular track, then it is likely that this will affect the decisions that trainers and jockeys make. If a horse wins a race at Caulfield on a wet track by getting an easy lead on the rails, that will increase the clamour in subsequent races to get that rail. The consequence is that there will be no more easy leads, eradicating any advantage to be had.

Some punters react to ideas of complexity and chaos by being fatalistic. If events are so muddled as to make the future difficult to predict, then what’s the point in trying? You may as well put as little rational thought into betting as possible and just enjoy the emotions that come your way as some bets win, but most lose.

Another approach, though, is to recognise that successful punting is not about making perfect predictions. Rather, it’s about being able to make slightly better predictions than the market average.

Recognising the chaotic nature of sporting events can be liberating. Rather than seeking simplistic, cause-and-effect answers as to why things happen, it allows punters insight into the various factors that likely had the most significant impact on any result. Analysing these allows a better understanding of what has happened and a clearer understanding of the probabilities of something similar happening again.

Most, though, understanding the complexity of sporting events highlights the need for successful punters to be probabilistic in their thinking. Listening to some punters, it’s clear that their mindset is deterministic. In their eyes, the future is already written and their only job is to determine what that future is. The reality is that all contests have a range of possible outcomes. The job of the punter is to understand, and attempt to quantify, that range.


Mayweather vs McGregor

For example, prior to the Floyd Mayweather and Conor McGregor fight, many fans expressed certainty in their predictions. For some, the predictions seemed so emotionally important that any other result would create an irreparable fault-line in their view of any kind of natural order or justice. Very few fans were discussing the likely result probabilistically.

When forced to think more like a statistician, though, their views could be modified. A friend, a UFC fan, told me he was certain that McGregor would win in the first round and wanted advice about how to go about placing a bet.  I said I would help, but asked if he would mind answering some questions first.

“If the first round was fought 100 times, how many times would McGregor stop Mayweather?” I asked.

“Five.” he replied.

I asked the same question for every round and he gave me a similar answer, although his number got smaller as we reached the latter rounds. He felt McGregor would only win one-out-of-a-hundred last rounds. I then asked him to shift his thinking to the fight as a whole, and, he thought, having now considered it more thoroughly, that McGregor would only win one-fight-in-five against Mayweather.

Reviewing the fight with him a few days later, he had not returned to his previous thought patterns. He recognised that, even though the fight had finished, and the result was known, that Mayweather’s 10th-round TKO was still only one of many possible outcomes that night. He joked that, perhaps, in a parallel universe, McGregor had indeed stopped Mayweather in the first round. That level of philosophical enquiry is probably too much for the average punter, but, nonetheless, it’s likely a healthy mentality to adopt if you want to be profitable. After all, chaos and complexity tell us that no result is guaranteed.


Conclusion

As an experiment, the Mayweather vs McGregor example was fascinating. It showed that even a first-time punter can think probabilistically. The barrier to doing so is not mathematical, it’s theoretical.  It’s about overcoming our cognitive need for certainty and simplicity. Recognising that a boxing match, and all of life, is complex and chaotic, with many possible outcomes, is the crucial first step.


About The Author – Jack Houghton 

As a passionate sports’ fan and punter, Jack has written about sports and betting for over a decade, winning the Martin Wills Award for racing journalism in 2002 and writing Winning on Betfair for Dummies, first published in 2006 and now in its second edition, having sold over 35,000 copies in two languages.


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