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History Repeating: Spain Beats Germany in the EURO 2012 Final

Author

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  • Achim Zeileis

    ()

  • Christoph Leitner

    ()

  • Kurt Hornik

    ()

Abstract

Four years after the last European football championship (EURO) in Austria and Switzerland, the two finalists of the EURO 2008 - Spain and Germany - are again the clear favorites for the EURO 2012 in Poland and the Ukraine. Using a bookmaker consensus rating - obtained by aggregating winning odds from 23 online bookmakers - the forecast winning probability for Spain is 25.8% followed by Germany with 22.2%, while all other competitors have much lower winning probabilities (The Netherlands are in third place with a predicted 11.3%). Furthermore, by complementing the bookmaker consensus results with simulations of the whole tournament, we can infer that the probability for a rematch between Spain and Germany in the final is 8.9% with the odds just slightly in favor of Spain for prevailing again in such a final (with a winning probability of 52.9%). Thus, one can conclude that - based on bookmakers' expectations - it seems most likely that history repeats itself and Spain defends its European championship title against Germany. However, this outcome is by no means certain and many other courses of the tournament are not unlikely as will be presented here. All forecasts are the result of an aggregation of quoted winning odds for each team in the EURO 2012: These are first adjusted for profit margins ("overrounds"), averaged on the log-odds scale, and then transformed back to winning probabilities. Moreover, team abilities (or strengths) are approximated by an "inverse" procedure of tournament simulations, yielding estimates of all pairwise probabilities (for matches between each pair of teams) as well as probabilities to proceed to the various stages of the tournament. This technique correctly predicted the EURO 2008 final (Leitner, Zeileis, Hornik 2008), with better results than other rating/forecast methods (Leitner, Zeileis, Hornik 2010a), and correctly predicted Spain as the 2010 FIFA World Champion (Leitner, Zeileis, Hornik 2010b). Compared to the EURO 2008 forecasts, there are many parallels but two notable differences: First, the gap between Spain/Germany and all remaining teams is much larger. Second, the odds for the predicted final were slightly in favor of Germany in 2008 whereas this year the situation is reversed.

Suggested Citation

  • Achim Zeileis & Christoph Leitner & Kurt Hornik, 2012. "History Repeating: Spain Beats Germany in the EURO 2012 Final," Working Papers 2012-09, Faculty of Economics and Statistics, University of Innsbruck.
  • Handle: RePEc:inn:wpaper:2012-09
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    File URL: https://www2.uibk.ac.at/downloads/c4041030/wpaper/2012-09.pdf
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    References listed on IDEAS

    as
    1. Forrest, David & Goddard, John & Simmons, Robert, 2005. "Odds-setters as forecasters: The case of English football," International Journal of Forecasting, Elsevier, vol. 21(3), pages 551-564.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Visualizing Euro 2012 with ggplot2
      by diffuseprior in DiffusePrioR on 2012-06-09 15:58:40
    2. Home Victory for Brazil in the 2014 FIFA World Cup
      by ? in R-bloggers on 2014-05-26 16:58:00
    3. Predictive Bookmaker Consensus Model for the UEFA Euro 2016
      by ? in R-bloggers on 2016-05-31 19:43:00

    More about this item

    Keywords

    consensus; agreement; bookmakers odds; sports tournaments; EURO 2012;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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