Date
19 November 2017
Goldman Sachs may be the king of Wall Street but its expertise doesn't extend to predicting the outcome of sporting events. Photo: Bloomberg
Goldman Sachs may be the king of Wall Street but its expertise doesn't extend to predicting the outcome of sporting events. Photo: Bloomberg

World Cup predictions: Hits and misses

With the World Cup coming to an end, it is now time to look at the hits and misses of those in the predictions game.

Technology titans Microsoft and Baidu and investment bank Goldman Sachs were among the several entities that had taken chances in forecasting the outcome of the soccer carnival in Brazil.

On the whole, it appears that the tech giants, with their sophisticated algorithms and mathematical models, have scored over the investment banks.

Microsoft’s prediction engine did well in predicting every match of the final stage of the World Cup, including the Germany-Argentina final, although it did less well in the preliminary rounds.

The predictions, delivered in Bing search engine results and through the Cortana virtual assistant on Windows phones, were part of a wider effort to make people keep coming back to Bing.

Following the success in the knockout stages, Microsoft plans to do more predictions in the future, on everything from the US midterm elections to the Emmy awards, digital news outlet Quartz reports.

China’s Baidu, meanwhile, has done even better than Microsoft in the overall competition. 

Baidu’s World Cup prediction service accurately predicted winners 58.3 percent of the time, compared with Bing’s 56.2 percent, according to a China Daily report. 

The Chinese firm not only correctly chose the four semi-finalists, it also predicted that Germany would win its match with Brazil, though it didn’t foresee the 7-1 score.

Baidu said its World Cup prediction model is based on data from as many as 37,000 matches played by 987 teams over the past five years. 

To improve the accuracy of the model, it also took into consideration five factors: the teams’ strength, home advantage, recent game performance, overall World Cup performance and bookmaker odds.

As for the ones making the wrong predictions, Goldman Sachs had the most egg on its face. 

In a pre-tournament analysis, the US bank forecast that Brazil would defeat Argentina in the final, 3-1. But on Sunday, Germany clinched its fourth title, beating Argentina, 1-0.

Notable was how heavy a favorite the bank made the host nation. It gave Brazil a 48.5 percent probability of winning the title, a figure that it noted was almost twice the 25 percent probability that Ladbrokes bookmakers had, New York Times pointed out.

Goldman claimed in its report that it “invested much more intensively this year in a model of the probability of success in a match between any two given teams, based on their track record and characteristics.”

But the final result came as a humbling experience for the blue-blooded financial institution.

Acknowledging its error, Goldman sent out a tweet Monday: “Congratulations @DFB_Team on a great team victory. Next time we might leave the #predictions to an octopus #WorldCup 2014.” 

The reference was to Paul the Octopus, the now-deceased cephalopod which correctly forecast the outcome of the previous games in 2010.

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RC

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