The Halo Effect in Betting
The halo effect is basically a cognitive bias or ‘judgement irrationality’ where your impression of a person influences your assessment of their overall character. People often think that because someone is beautiful, that they are also intelligent, trusting and kind.
“It is amazing how complete is the delusion that beauty is goodness.”
We see it with individuals such as celebrities. We believe that they are successful so in addition we think that they are attractive, agreeable, kind, often along with a whole host of other positive character traits. Very often our assessment is far from the truth!
In the old westerns the good guys wore white hats, the bad guys wore black hats, Cinderella was prettier than the ugly sisters…she was good, the ugly sisters were mean.
So the halo effect is ‘incorrect reasoning’ where a wider impression is formed from a single character trait or characteristic of a person or group.
The Halo Effect in Sports
Perhaps in football terms the ‘delusion’ that Leo Tolstoy refers to in his quote – might be how ‘a great team playing beautiful football remains a great team in the eyes of the people – long after their peak’ .
The Brazilian national soccer team is generally one of the top favourites for the World Cup every time the competition comes around. Granted, they have won the competition more than any other team but those victories are all but a distant memory – 1958, 1962, 1970, 1994, 2002. There are players out there today who weren’t even born when Brazil last on the World Cup.
Yet the great team of the 1970’s endures in many poeple’s minds and serves to skew their perception regarding the quality of recent teams. It’s understandable – they were incredible!
However, from a tournament betting perspective you would be wise to put such thoughts aside. This is backed up by the mauling Brazil got on their home turf by Germany in 2014. In footballing terms the world has caught up with Brazil and it will be interesting to see if they have a period of domination in World Cups over the next fifty years or so.
There are many examples of the halo effect in sports. For the smart bettor it provides an opportunity to bet against or avoid what are often short priced favourites. Over the last few years we’ve seen Tiger Woods falter, Manchester Utd. go through a terrible period, Germany implode at a World Cup!
Take Liverpool for instance. They are almost always considered to be a ‘big club/team’ despite not having ever won the Premier League and last winning the league in 1990. Manchester City are the current Premier League champions and the most consistent team over the last couple of seasons but don’t always get the consideration they deserve. History bears influence.
The horn effect is essentially the halo effect in reverse, where a negative trait overrides other traits. Also, if for instance the 7-1 thrashing of Brazil by Germany and some subsequent poor performances had taken place prior to Brazil’s golden periods, their would most likely still have been some reluctance to accept them as a great team. The fact that Brazil had that great period / team and have had subsequent poor performances makes us more forgiving. The order in which events occur is important.
The halo (and horn) effects crop up in every walk of life from finance to personal relationships. Force your mind to become rational – especially when important issues are at stake.
Know that a great idea is still a great idea, even if it is put forward by an overweight, ugly, antisocial drunk. A bad idea is still a bad idea, even if it is put forward by a slim, good-looking, popular hero.
Beware the horn and halo effects!