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Why acknowledging the halo effect and availability heuristic can help you become a better bettor

The vast majority of people who bet on sports are first and foremost fans of the particular sport in question. They are likely to have accumulated knowledge about tennis, football, rugby or athletics long before they sought to make money from their predictions about it. It is partly for this reason that many sports bettors rely on their intuition when it comes to backing their forecasts with money.

Relying on instant reactions or gut feelings can be useful when you are trying to work out if someone is annoyed with you. However, it is not an ideal tool to rely on in the world of sports betting – in part because of a phenomenon known as the halo effect. This term refers to a cognitive bias in which our (often incomplete) impression of a person affects what we think about their character. For instance, we are more likely to associate positive characteristics with a photograph of a good-looking, smiling individual in a magazine than someone who is scruffily dressed and scowling, even though we do not know anything at all about the personalities of the people in question.

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How to bet on local football derbies to increase your chances of success

There is nothing quite like a local derby in football. No matter which club he or she supports, the first thing a fan will check when the season’s fixtures are released is when their team is scheduled to face its local rival.

Top-level European football is a globalised affair these days, and it is increasingly common for classic derbies such as Roma vs Lazio, Manchester City vs Manchester United and Atletico Madrid vs Real Madrid to feature very few players born anywhere near the city in which the match is taking place. Yet despite this, these games continue to matter more than any other, with players and coaches quickly getting on board with the supporters’ passion.

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How can we explain home advantage in football?

Home advantage is a much explored phenomenon in the sporting world, and although there are conflicting views regarding the principal reason for its existence, few deny that it is real. It is particularly prominent in football, where playing on your own patch almost always increases your chances of victory in any given encounter.

In the 2018/19 English Premier League, the home side won 181 games and the away team triumphed in just 128 matches. Only one of the division’s 20 clubs collected more points in away matches than home ones.

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Does the hot-hand phenomenon exist in sports betting?

“Hot hand” is a word which comes from basketball. It refers to a player who is in good form, who is said to have hot hands. According to perceived wisdom, this player is more likely to be successful with a shot if his previous attempts were successful.

What does this have to do with sports betting, we hear you cry? Well, quite a lot, actually: there is a belief among some that a bettor who has been successful previously has a better chance of replicating that success in the future.

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The relationship between sports betting and economic bubbles

Irrationality in the market tends to benefit a small pool of investors, as seen in subprime mortgage bubbles. Believe it or not, there are similarities between this and the world of sports betting, where the prevention of information signalling can also cause market inefficiency.

When an asset is overvalued – that is, a higher value is attached to it than it is actually worth – the result is a bubble. In sports betting, a value bet is defined as one in which the probability of an outcome occurring is more likely than what the odds on it happening infer.

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Are you a serious or casual bettor?

There are countless people all across the globe who participate in sports betting. Many of these people do so for fun – it can add an element of entertainment to the process of following your favourite team, and it can also be an enjoyable activity to share among a group of friends. Others participate in sports betting because they want to earn a living from the endeavour; these people dedicate a large chunk of their time to research as they search for exploitable edges and keep up to date with important factors such as form and injuries.

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Where does the favourite-longshot bias come from?

The favourite-longshot bias has a major effect on sports betting, but we tend to view the phenomenon through the prism of the bettor, rather than the bookmaker. This article serves as an attempt to readdress that balance and provide a fresh perspective on something every bettor should be aware of.

The favourite-long shot bias refers to when bettors tend to overvalue longshot selections and undervalue favourites. In simple terms, this is a form of bettor irrationality – and bookmakers, as they always do, react to it. In this case, they shorten their odds as a response to this common behaviour. And that, of course, is bad news for those looking to maximise their returns.

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