Price Sensitivity and Results-Oriented Thinking

Switching your bet will sometimes move you from a winning outcome to a losing outcome. In the long run, it's still the right decision if you're being price sensitive.

By | February 09, 2022

Here’s a scenario I know that will happen at some point with some Betscope users:

  • A user will load an odds page for a game, change some values on markets they want to bet, and run them through the correlations engine. 

  • The ROI calculator will then recommend a correlated bet they weren’t thinking of because it identifies a price inefficiency for that market.

  • The user will change their bet from the original market they were thinking of to the new bet.

  • The game will start, and their original bet will win but the recommended bet will lose.

  • The user will curse this stupid product for talking them out of the original bet they wanted to make and never use it again.

This may have happened already for all I know. (It may have happened to you, in which case I hope you keep reading.) I’m sympathetic to how frustrating this can be. If you’ve played any kind of fantasy sports where you have to construct lineups and have a rostering decision between two players, you have probably been in a spot where had you picked the other player, you would have won. It’s one thing if it’s your own judgment that you’re second guessing, but it’s another when some external force (a recommendation or pick from a tout, an analytics tool/service, etc.) talks you into making a decision that ended up not winning.

I have stared at my own numbers and analytics for marginal decisions in many situations, took an educated guess, and been “close” to huge wins had I only went in a slightly different direction. In the case of Betscope, where the correlations engine/ROI calculator combo is based on exploiting price inefficiencies, it’s worth taking a deeper look into what’s going on when it inevitably recommends a bet that doesn’t end up winning, because it’s adjacent to a line of thinking every professional bettor has learned to avoid: results-oriented thinking.

Let’s say in a basketball game- the Spurs/Cavs game today, for example- you like the Cavs to cover their -5.5 spread, so you change the home spread from -5.5 to -8 in the Betscope odds page and run the correlations engine to see all the other outcomes that happen if that -8 number is correct.

The ROI calculator then recommends you bet the under on Derrick White’s points props because Fanduel has a mispriced line and you should attack your pro-Cavs belief through betting an inefficiently priced under on a Spurs player’s points prop.

Let’s say after the game finishes, the Cavs cover, but White’s points prop hits the over. You may be upset that Betscope recommended you a bet that didn’t win when you feel like you picked correctly the first time. Now, ask yourself a slightly different question:

Would I still have switched my bet if I were getting 100-1 odds on that bet?

The answer should obviously be yes, because that would be crazy value. And I’m guessing that if you switched to that 100-1 bet, you wouldn’t be as upset that it lost, because there’s no doubt in your mind that it was the right decision. So what exactly is different about those two scenarios besides the payout? Sure, the outcome wasn’t what you wanted in both cases, but you can’t control the outcome of anything you bet on, you can only control whether or not to bet on it depending on what price you get. And that’s the question you should always be asking when evaluating your results: did you get the right price for your beliefs on what you thought would happen.

It’s natural to get upset when a bet doesn’t hit; bad beats is its own genre of entertainment for a reason. But professional bettors don’t worry about the outcome of any given bet, or even their win-loss record on bets overall. The only metric that matters is whether or not their bankroll is going up over time. There are definitely more stable ways to track whether or not you’re getting the right price over the long term; I think using a bet tracker like Betstamp is essential to more stable measurements of your betting decisions, like how much closing line value you’re getting.  

This is one of the real benefits of increasing your awareness of price sensitivity in sports betting: it forces you to focus on the things you can control and not worry about the things you can’t. There are longer conversations to be had around the topic of how to handle swings, variance, and randomness. Everyone who’s played poker, daily fantasy, traded, or bet a lot has had experience navigating the mental aspect of voluntarily introducing financial volatility into their lives, and speaking from experience, it’s not easy, but it is something that you can work on. (If you’re looking to learn more about how, I cannot recommend The Mental Game of Poker enough for some great actionable steps on how exactly to do so.) Sure, it sucks when you lose a bet, but it’s a lot easier to swallow when you know your bet was the right decision. And in the long run, attacking the sports betting market at its weakest points through price inefficiencies is always going to be the right decision. So every time you get switched to a different bet and it doesn’t hit, be confident that as long as you’re getting your money down on inefficiently priced lines, over the long run, you will make money.