My previous experience as a professional sports bettor relied heavily on efficient market hypothesis. It suggests that asset prices reflect all available information. In sports betting terms, in a free market (such as an exchange like Betfair exchange) the prices on any event accurately reflects that events chance of occurring.
This theory’s origins come from the early 1900s (and wasn’t popularised till decades later), and one story explains it well. In 1906 the great statistician Francis Galton observed a competition to guess the weight of an ox at a country fair. Eight hundred people entered. Galton, being the kind of man he was, ran statistical tests on the numbers. While some individual guesses were far too high, and others very low, he discovered that the average guess (1,197lb) was extremely close to the actual weight (1,198lb) of the ox. This story was told by James Surowiecki, in his entertaining book The Wisdom of Crowds. I highly recommend it.

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