New research shows that Twitter activity can help predict the result of football matches when combined with betting market prices.

The tone of Twitter posts can predict when a team is more likely to win and soccer bets are mispriced, the study by the University of East Anglia (UEA) found.

Researchers examined 13.8 million tweets - an average of 5.2 tweets per second - during an English Premier League (EPL) season. These were compared with in-play betting prices available at the same time on Betfair, the world’s largest online betting exchange.

They found that if the combined tone of tweets in a given second during a match was positive, as measured by a micro-blogging dictionary, then the team was more likely to win than the betting market prices implied.

Tweets were particularly informative in the aftermath of goals and red cards, suggesting that social media content is particularly useful in assessing the implications and significance of new information.

Social media is used as a forecasting tool by a variety of firms and agencies, but the researchers wanted to find out how useful and accurate it is. They measured the aggregate tone of all tweets for each team, in each second of 372 matches that took place during the 2013/14 season.

The study, published today in the journal Economic Inquiry, was conducted by Dr Alasdair Brown, of UEA’s School of Economics, and colleagues at the Universities of Dundee and Reading, and Birkbeck, University of London.

Dr Brown, a senior lecturer in economics, said: “The modern forecaster has a number of tools at their disposal. In particular, prediction markets and social media have proved extremely popular.

“We know that prediction markets, such as Betfair, generally lead to accurate forecasts, and outperform individual experts and polls in many settings. However, we wanted to find out if social media has anything to add. Can we combine probability forecasts from prediction markets with social media output to improve our predictions?

“We find that Twitter activity predicts match outcomes, after controlling for betting market prices. Much of the predictive power of social media presents itself just after significant market events, such as goals and red cards, where the tone of Tweets can help in the interpretation of information.

“In short, social media activity does not just represent sentiment or misinformation. If sensibly aggregated it can, when combined with a prediction market, help to improve forecast accuracy.”

The researchers constructed a number of betting strategies to quantify the degree of mispricing that social media predicts. Using conservative estimates of the commission paid to Betfair, and a strategy of betting when Tweets on a team are positive, a bettor could have earned an average return of 2.28 per cent from 903,821 bets. This compares favourably with average returns of -5.41 per cent across the matches studied.

Dr Brown said these were significant returns given the size of the Betfair betting market for EPL soccer matches, the very short horizon, less than 90 minutes, of the holding periods for most bets, and the fact that bets usually have negative expected returns.

The authors also wanted to examine whether tweets were particularly informative before a goal was scored, in which case this would suggest that social media users break news faster than betting/prediction markets. However, they found no evidence of this. 

“These results fit in with recent evidence that social media content can be useful as a forecasting tool,” said Dr Brown. “For example, there is evidence that social media output, both on Twitter and on financial message boards, predicts future stock returns. 

“At first glance this may be surprising, as we might think that an individual in possession of valuable information would bet or trade first, and post later. However, if we think that valuable information is dispersed among a number of individuals, then we might understand why social media content leads market prices, as it does in this study and elsewhere.”

Dr James Reade, sports economist at the University of Reading and a co-author of the study, said: “This is a real 'wisdom of crowds’ kind of outcome. It says that if we listen to the right parts of the crowd, we can gain more information and make better predictions.

“It’s great for football fans, who always want to know what others think of their team. Betting prices, allied with the general mood on Twitter, can give a really accurate picture of where a match is going, in real time.”

‘Forecasting with Social Media: Evidence from Tweets on Soccer Matches’, Alasdair Brown, Dooruj Rambaccussing, J James Reade and Giambattista Rossi, is published in Economic Inquiry on Friday October 13.

Source: University of East Anglia (UEA)

Illustration Photo: Football competition (Public Domain from Pixabay.com)

Read more

Comments

No comments to display.

Related posts

EU's Call for Proposals: An empowering, inclusive Next Generation Internet

The objective is to support actions on smarter, open, trusted and personalised learning solutions to optimise digital learning and to allow learners to engage and interact with content and with peers.
Application Deadline in 5 months

Singapore to establish Additive Manufacturing Facility and Applications in Maritime Sector

The facility’s location also leverages PSA’s parts supplier base and facility operations to support just-in-time inventory. This move towards digitised inventories reduces the need to hold excess inventory, which lowers storage costs, while shortening turnaround time from weeks to days due to improved availability of spare parts. In the long run, PSA will expand the scope of these services to the wider maritime industry, including ship owners, to help build its business adjacencies.

EU's Call for Proposals: The AQUAEXCEL2020 twelfth call for access

The facilities available cover the entire range of production systems (cage, pond, recirculation, flowthrough, hatchery and disease challenge); environments (freshwater, marine, cold, temperate and warm water); scales (small, medium and industrial scale); fish species (salmonids, cold and warm water marine fish, freshwater fish and artemia); and fields of expertise (nutrition, physiology, health & welfare, genetics, engineering, monitoring & management technologies).
Application Deadline in a month

Environment and Big Data: Role in Smart Cities of India

This study identifies six environmental factors, which should be integrated in the development of smart cities. These environmental factors include indicators of landscape and geography, climate, atmospheric pollution, water resources, energy resources, and urban green space as a major component of the environment.

Corteva Agriscience and IRRI Ink Partnership to Develop Advanced Rice Technologies and Programs

The partnership seeks to improve the genetic outcomes of breeding programs, encourage sustainable rice cultivation, and develop new rice varieties which deliver higher yields and are more resilient against biotic and abiotic stresses.

Call for Applications: Communication projects which mitigate anthropogenic climate change

The Minor Foundation for Major Challenges (MFMC) is inviting applications from all over the world to fund communication projects which mitigate anthropogenic climate change.
Application Deadline in a month

EU's Call for Proposals: Digital technologies for improved performance in cognitive production plants

Proposals need to develop new technologies to realise cognitive production plants, with improved efficiency and sustainability, by use of smart and networked sensor technologies, intelligent handling and online evaluation of various forms of data streams as well as new methods for self-organizing processes and process chains.
Application Deadline in 4 months

Study reveals best use of wildflowers to benefit crops on farms

For the first time, a Cornell University study of strawberry crops on New York farms tested this theory and found that wildflower strips on farms added pollinators when the farm lay within a "Goldilocks zone," where 25 to 55 percent of the surrounding area contained natural lands.

EU's Call for Proposals: Reinforcing the EU agricultural knowledge base

Activities shall analyse and compare the approaches taken on their performance and impact for farmers/foresters as well as effectivity of the communication and information channels used for dissemination in countries and regions.
Application Deadline in 3 months

The Bali Fintech Agenda: A Blueprint for Successfully Harnessing Fintech’s Opportunities

In response to the Bali Fintech Agenda, the World Bank will focus on using fintech to deepen financial markets, enhance responsible access to financial services, and improve cross-border payments and remittance transfer systems.