There are a number of applications for risk analysis software and Monte Carlo Simulation, and most offer insight into solving pretty serious situations like public health, workplace safety, budgets, etc. From time-to-time, we find utilizations are less “mission critical” and more “cool.” Such is the case with Dr. Wayne Winston’s use of Palisade’s @RISK. Winston is a professor at the University of Houston, a sports probabilities expert and longtime user of @RISK. In a guest blog post in Risk Management Monitor, Palisade Vice President Randy Heffernan explored Winston’s utilization of Monte Carlo simulation, in relation to so-called “prop bets" for this Sunday's Super Bowl. From the article:
Most bets are relatively straightforward; however, if you’ve ever been to Las Vegas to watch the big game, you’ll find Super Bowl wagers are taken to an entirely different—and more complex—level. In addition to traditional wagers, you’ll find an almost unlimited number of proposition—or “prop”—bets that can stray into more peripheral aspects of the game. Consider the following prop bets from last year’s Super Bowl between the Ravens and 49ers:
Who will win Super Bowl MVP?
Winning bet: Ravens’ QB Joe Flacco at 11/4 odds
What color will the Gatorade (or liquid) be that is dumped on the winning coach?
Winning bet: Clear/water at 7/4 odds
Will Alicia Keys’ rendition of the national anthem be over/under 2:15?
Winning bet: Over, at 2:42
In the article, Randy offers a comparison of Winston and Vegas’ confidence regarding the number of touchdown passes Broncos quarterback Peyton Manning will throw against the Seahawks on Sunday.