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Protoman

Joined: 09 Aug 2005
Posts: 78

Posted: Thu May 18, 2006 1:59 am    Post subject: "Implied" Probability

What is the difference between odds and probability? Why is 1:1 odds
equal to a probability of 1/2?
I plan on being a bookmaker, and I need to know whether the implied
probability of these odds will be greater than 1 so I can make a
profit:

Home team wins: 1:4
Visiting team wins: 1:1
Tie: 1:9

What is "implied probability"?

Thanks!!!!!
Michael Zedeler
science forum beginner

Joined: 29 Nov 2005
Posts: 17

Posted: Thu May 18, 2006 9:02 am    Post subject: Re: "Implied" Probability

DarkProtoman wrote:
 Quote: What is the difference between odds and probability? Why is 1:1 odds equal to a probability of 1/2? I plan on being a bookmaker, and I need to know whether the implied probability of these odds will be greater than 1 so I can make a profit: Home team wins: 1:4

With what is dubbed the frequency interpretation, this means that out of
5 games (1 + 4 = 5), the home team is most likely to win once.

It is the same system as mixing drinks. Home team: 1 part and visitors:
4 parts. 5 parts in total and home team comprising 1/5 = 20% of the mix.

 Quote: What is "implied probability"?

I am not sure. Possibly the probability you get when you do math as
above. There is a lot of mathematics that is related to gambling, called
game theory, see

http://en.wikipedia.org/wiki/Game_theory

Regards,

Michael.
--
Which is more dangerous? TV guided missiles or TV guided families?
Get my vcard at http://michael.zedeler.dk/vcard.vcf
Protoman

Joined: 09 Aug 2005
Posts: 78

Posted: Thu May 18, 2006 4:55 pm    Post subject: Re: "Implied" Probability

You know what? Not many people are going to bet w/me, using those odds;
they're REALLY short. I'm probably going to cater to idiots and the
mathematically and financially challenged. I mean, my commision is
54.5%!!!!!!

\$100(.90)=\$90
\$100(.80)=\$80
\$100(.50)=\$50
--------------------
\$100(2.2)=\$220
\$220-\$100=\$120
\$120/\$220=54.5% commision

I'm praying there's more idiots w/o common sense in the world than
smart people...
z
science forum beginner

Joined: 05 Apr 2005
Posts: 17

Posted: Tue May 23, 2006 6:12 pm    Post subject: Re: "Implied" Probability

DarkProtoman wrote:
 Quote: You know what? Not many people are going to bet w/me, using those odds; they're REALLY short. I'm probably going to cater to idiots and the mathematically and financially challenged. I mean, my commision is 54.5%!!!!!! \$100(.90)=\$90 \$100(.80)=\$80 \$100(.50)=\$50 -------------------- \$100(2.2)=\$220 \$220-\$100=\$120 \$120/\$220=54.5% commision I'm praying there's more idiots w/o common sense in the world than smart people...

Boy, are you in luck:
<http://www.cnn.com/ELECTION/2004/pages/results/electoral.college/>

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