| 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. |