Friday, August 09, 2013

Beta-Binomial (Wins And Losses)

In trading sports events, it is necessary to continually update one's opinions conditioned on new information. In many sports, the only information available is in the form of wins and losses. In that context, two technical articles worth reviewing include the following excellent contributions - Regression To The Mean And Beta Distributions, and Market Efficiency and Bayesian Probability Estimation via the Beta Distribution.