As the World Cup in Brazil approaches this summer, worldwide anticipation has reached a fever pitch. In South America, and Brazil in particular, office pools and group bets are popping up, with soccer fans hoping to pick the winning team. At Palisade, we don’t believe in taking wild guesses—which is why Fernando Hernández, consultant and trainer for Palisade Corporation, developed a model using DecisionTools Suite software to forecast the probabilities of each one of the 32 national soccer teams winning this ultimate championship.
Taking data from the rankings of over 200 national teams from FIFA spanning the past four years (2011-2014), Hernández created a model that uses @RISK to determine the probabilities of different teams winning at different stages, and PrecisionTree for mapping this information into a tree, or bracket, format. @RISK uses Monte Carlo simulation to compute thousands of different possible outcomes for the tournament automatically. The historic strengths and weaknesses of each team are accounted for in the statistical models used to represent each matchup.
After running 50,000 iterations, the model probabilistically channels each team into an eventual tournament win, and calculates its odds.Depending on certain ranking assumptions, the odds calculations may vary significantly. However, a robust approach that considers both historic and current rankings yielded the following results:
With a home advantage incorporated, Brazil has the largest probability of becoming champions with a 17% chance, with Spain coming as a runner up with 12% probability. Aside from those two pack-leaders, the following six teams have the next greatest chances in taking the cup (in descending order): Switzerland (8%), Greece (8%), Germany (7%), Colombia (7%), Argentina (6%) and Uruguay (5%). Clearly, these probabilities do not differ significantly, which could make for an unpredictable championship if the two front-runners fail to win.
Without considering home advantage, Germany would be the most likely winner, with a 19.9% chance.
Hailing from Costa Rica, Hernández concedes that his trust in risk modeling may override national pride when it comes to placing bets on the World Cup. “I am still not sure whether I would bet on my country, Costa Rica, in the office pool. In a group with three former World Champions–Uruguay, Italy and England–it only stands a 23% chance of classifying for second round, and only one chance in 440 of becoming World Champions.”