1/ Thread: Is Cricket a game of skill or luck?
Cricket is the only sport I have religiously followed since childhood.
You don’t have to understand Cricket to be able to follow this thread, but having an interest in Cricket will certainly help you relate more to the content.
Cricket is the only sport I have religiously followed since childhood.
You don’t have to understand Cricket to be able to follow this thread, but having an interest in Cricket will certainly help you relate more to the content.
2/ While reading @mjmauboussin's book "The Success Equation", I came across an interesting methodology to differentiate between the role of luck and skill in any given sport.
While Mauboussin discussed quite a few sports, he didn't discuss Cricket.
While Mauboussin discussed quite a few sports, he didn't discuss Cricket.
3/ So I decided to figure out the role of luck vs skill in Cricket following the same methodology.
There are, of course, three formats in the game of cricket.
In this thread, I will focus on Indian Premier League (IPL), and One Day International (ODI) World Cup tournaments.
There are, of course, three formats in the game of cricket.
In this thread, I will focus on Indian Premier League (IPL), and One Day International (ODI) World Cup tournaments.
4/ Let’s first ask ourselves what we would expect to see if the game were entirely dependent on luck i.e. the equivalent of a coin toss.
We would expect to see 50% probability of winning any game (assuming every match is independent and ignoring tie/no result matches).
We would expect to see 50% probability of winning any game (assuming every match is independent and ignoring tie/no result matches).
5/ The methodology has four steps. See the image for the each of the steps. I will use 2019 WC to explain this methodology further.
6/ Here's an illustration of the methodology using 2019 World Cup (WC). Each of the steps, along with the formula, is given in the image.
So, what's the verdict?
40% of the result is explained by luck, and skill explained the rest 60% in 2019 WC.
How about other WCs?
So, what's the verdict?
40% of the result is explained by luck, and skill explained the rest 60% in 2019 WC.
How about other WCs?
7/ The median role of luck and skill in all the World Cups so far is 50-50!
Wait, what does this even mean? Does this mean a coin toss is as good as predicting India is going to win against Namibia in a WC match? Nope.
The inferences are actually pretty counter-intuitive.
Wait, what does this even mean? Does this mean a coin toss is as good as predicting India is going to win against Namibia in a WC match? Nope.
The inferences are actually pretty counter-intuitive.
8/ To understand the inferences, we need to explain "paradox of skill" first.
Think about India playing against Bermuda in a five match series. The result is extremely likely to be 5-0 in India's favor if both teams play their full strength teams...
Think about India playing against Bermuda in a five match series. The result is extremely likely to be 5-0 in India's favor if both teams play their full strength teams...
9/ ...When there is wide divergence in terms of skill sets, luck plays a minor role since it is the skill that makes all the differences.
On the other hand, When India plays against Australia, both teams are highly skilled and both are close match for each other.
On the other hand, When India plays against Australia, both teams are highly skilled and both are close match for each other.
10/ If one team is luckier than the other one, luck plays a disproportionate role.
To say it differently, even if the absolute skill level of everyone increases in a certain sport/activity, the outcome of the activity is likely to depend on luck even more than earlier.
To say it differently, even if the absolute skill level of everyone increases in a certain sport/activity, the outcome of the activity is likely to depend on luck even more than earlier.
11/ Paradox of skill is VERY relevant in investing as well. As more and more less skilled investors choose passive index, the investing arena becomes increasingly left with skilled players.
Every source of skill becomes table stake soon.
Every source of skill becomes table stake soon.
12/ So you can have much higher skill than an active investor in the 60's-70's, and yet fail to beat today's markets.
"Paradox of Skill" clarifies this apparent confusion.
"Paradox of Skill" clarifies this apparent confusion.
13/ Paradox of Skill becomes even more apparent when you look at IPL matches.
Think about how IPL teams are formed. Every club owner buys skilled players. Since every club ends up with full of skilled players, it is luck that decides the fate for them.
Think about how IPL teams are formed. Every club owner buys skilled players. Since every club ends up with full of skilled players, it is luck that decides the fate for them.
14/ It also makes intuitive sense that T20 matches are more affected by luck than ODIs or Test matches.
Let me explain with 2019 IPL results. Same methodology as explained earlier was followed here. See the image for teams' standings after group stage.
Let me explain with 2019 IPL results. Same methodology as explained earlier was followed here. See the image for teams' standings after group stage.
15/ Just looking at how tight the league standings was, you can sense luck played a huge role.
It would still probably shock you to know that luck played more than 100% role. This also happened in 2010, 2011, 2016, and 2018.
You're probably confused as to how to interpret this
It would still probably shock you to know that luck played more than 100% role. This also happened in 2010, 2011, 2016, and 2018.
You're probably confused as to how to interpret this
16/ What does "negative" contribution of skill even mean?
It only indicates all teams are so similarly skilled that it is not enough for you to win if luck is with your opponent. But if you lag behind the skills of your opponent, you almost have no chance to win.
It only indicates all teams are so similarly skilled that it is not enough for you to win if luck is with your opponent. But if you lag behind the skills of your opponent, you almost have no chance to win.
End/ It took me a while to grasp this, and without considering paradox of skill, it is indeed difficult to explain.
There is a reason Cricket is called the "glorious game of uncertainties". If skill made all the difference, it would be labelled otherwise: "A game of certainty".
There is a reason Cricket is called the "glorious game of uncertainties". If skill made all the difference, it would be labelled otherwise: "A game of certainty".
*I inserted an incomplete image here (step 4 is missing). Here's the updated image:
