Projecting Win Probabilities in Fantasy Sports

[jjpbq6]

So, I made it to the finals for my fantasy football league. The winner receives $100 and the runner-up $10 (maybe disregard this runner-up reward for simplification). I wanted to know how to calculate an offer to both teams, based upon the probability of winning, such that any risk-neutral player would accept.

I believe once odds or a percentage of winning the week had been put in place, each team would get the expected value of their winnings. So, if the outcome was 50/50, risk-neutral players would accept a deal of $50 each before the game was every played.

Now computing the odds is where I'm getting caught up. Each week, the league will provide a projected score for each team, which is relevant to players involved, opponents faced, health status, etc. These scores are seldom accurate. So, I noted the absolute value of weekly differences between projected and actual scores for both teams. From there I found the variance and standard deviation of this statistic.

I was thinking that given the variance of the league's projections and given the projection for the championship week, you could ascertain some long-run average score for the week, for both teams. Once you had done that, you could create odds that informed the expected value of winning the $100. (Note: must assume that the league's projections are independent by week and not conditionally updated). Does this sound like it's going in the right direction? Any advice or experience?

 

[Jhero]

Thanks!Yes, this sounds like it's going in the right direction. However, a few things to consider:1. You may want to take into account not only the variance and standard deviation of the league's projections, but also their accuracy. If the league's projections are consistently off by a certain amount, then that should be taken into account when calculating the odds.2. You may also want to consider other factors such as the overall skill level of each team and how the teams matchup against each other. This could affect the expected value of winning the $100 for each team.3. Lastly, you should also consider the utility (i.e., satisfaction) of winning the championship for each team. This could influence the expected value of winning the $100 and could be a factor in an offer that any risk-neutral player would accept.