Who exactly are those silly academics who aren’t as smart as a Vegas bookie?

December 20, 2012
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(This article was originally published at Statistical Modeling, Causal Inference, and Social Science, and syndicated at StatsBlogs.)

I get suspicious when I hear unsourced claims that unnamed experts somewhere are making foolish statements.

For example, I recently came across this, from a Super Bowl-themed article from 2006 by Stephen Dubner and Steven Levitt:

As it happens, there is one betting strategy that will routinely beat a bookie, and you don’t even have to be smart to use it. One of the most undervalued N.F.L. bets is the home underdog — a team favored to lose but playing in its home stadium. If you had bet $5,000 on the home underdog in every N.F.L. game over the past two decades, you would be up about $150,000 by now (a winning rate of roughly 53 percent).

So far, so good. I wonder if this pattern still holds. But then Dubner and Levitt continue:

This fact has led some academics to conclude that bookmakers simply aren’t very smart. If an academic researcher can find this loophole, shouldn’t a professional bookie be able to?

But the fact is most bookies are doing just fine. So could it be that bookies have a good reason to allow that loophole to dangle? Could it be that a seemingly dumb bookie is actually dumb like a fox?

So here we seem to be on familiar Freakonomics territory. An unnamed academic says something stupid, only to be shot down by regular-guy “Chuck Esposito, a genial, quick-witted and thoroughly sports-fixated man who runs the race and sports book at Caesars Palace in Las Vegas.”

I’m reminded of the punchline of that joke from grade school: “Hey, man, the smartest guy in the world just jumped out of the plane wearing my backpack.” Once again, the pointy-headed academics get their comeuppance.

What I want to know is, who exactly are those academics who “conclude that bookmakers simply aren’t very smart”? Are these respected academics such as John List, Emily Oster, and Casey Mulligan? Or are Dubner and Levitt talking about some professors of communication studies at some college I’ve never heard of?

I’m reminded of this bit by that great populist David Denby of the New Yorker:

Academics have told me [Denby] that “Oz” is a mythic structure, a descendant of the Odyssey or the Aeneid, but they look at me blankly when I say that the movie is also a summa of nineteen-thirties show business.

What kinds of academics was he talking with?? I’m no expert, but even I know that Dorothy’s sidekicks were old vaudevillians.

As a professor myself, I don’t like the implicit anti-intellectualism under which the Alvin H. Baum Professor of Economics at the University of Chicago, along with various comfortably situated journalists, forms an implicit alliance with regular-guy readers against those silly unworldly academics. But maybe in these particular examples, Dubner, Levitt, and Denby have particular examples in mind. I’m certainly willing to be informed on the matter.



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