The degree of inefficiency in the football betting market Statistical tests

Golec, Joseph H.

doi:10.1016/0304-405x(91)90034-h

Cited by 134 publications

(81 citation statements)

References 20 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Because bets on favorites and underdogs are about equally likely to pay out (with underdogs winning slightly-but significantly-more often; Golec & Tamarkin, 1991), then, normatively speaking, people should be either equally likely to bet on favorites and underdogs or even more likely to bet on underdogs than favorites. Moreover, they should also have either equal confidence in their predictions of underdogs and favorites, or they should be more confident, overall, in underdog predictions.…”

Section: Intuitive Betrayal Hypothesismentioning

confidence: 99%

Intuitive confidence: Choosing between intuitive and nonintuitive alternatives.

Simmons

Nelson

2006

Journal of Experimental Psychology: General

178

197

View full text Add to dashboard Cite

People often choose intuitive rather than equally valid nonintuitive alternatives. The authors suggest that these intuitive biases arise because intuitions often spring to mind with subjective ease, and the subjective ease leads people to hold their intuitions with high confidence. An investigation of predictions against point spreads found that people predicted intuitive options (favorites) more often than equally valid (or even more valid) nonintuitive alternatives (underdogs). Critically, though, this effect was largely determined by people's confidence in their intuitions (intuitive confidence). Across naturalistic, expert, and laboratory samples (Studies 1-3), against personally determined point spreads (Studies 4 -11), and even when intuitive confidence was manipulated by altering irrelevant aspects of the decision context (e.g., font; Studies 12 and 13), the authors found that decreasing intuitive confidence reduced or eliminated intuitive biases. These findings indicate that intuitive biases are not inevitable but rather predictably determined by contextual variables that affect intuitive confidence.

show abstract

Section: Intuitive Betrayal Hypothesismentioning

confidence: 99%

Intuitive confidence: Choosing between intuitive and nonintuitive alternatives.

Simmons

Nelson

2006

Journal of Experimental Psychology: General

178

197

View full text Add to dashboard Cite

show abstract

“…This phenomenon has been identifi ed in a variety of sports betting markets, including the European football betting market (see, for example, Cain et al, 2000Cain et al, , 2003. In some markets, such as the American football (NFL) and baseball spread betting markets, a reverse effect has been observed (see Golec and Tamarkin, 1991;Woodland and Woodland, 1994). Vaughan Williams and Paton (1998) provide a rationale that accounts for such disparities.…”

Section: Literature Review: Betting Markets and Efficiencymentioning

confidence: 99%

How efficient is the European football betting market? Evidence from arbitrage and trading strategies

Vlastakis

Dotsis

Markellos

2008

Journal of Forecasting

View full text Add to dashboard Cite

This paper assesses the international effi ciency of the European football betting market by examining the forecastability of match outcomes on the basis of the information contained in different sets of online and fi xed odds quoted by six major bookmakers. The paper also investigates the profi tability of strategies based on: combined betting, simple heuristic rules, regression models and prediction encompassing. The empirical results show that combined betting across different bookmakers can lead to limited but highly profi table arbitrage opportunities. Simple trading rules and betting strategies based on forecast encompassing are found capable of also producing signifi cant positive returns. Despite the deregulation, globalization and increased competition in the betting industry over recent years, the predictabilities and profi ts reported in this paper are not fully consistent with weak-form market effi ciency.

show abstract

“…Moreover, sports 3 data are readily available and they are measured much more precisely than most economic data. This has led to studies on racial discrimination (Gwartney and Haworth, 1974;Kahn and Sherer, 1988;Nardinelli and Simon, 1990;Stone and Warren, 1999;Szymanski, 2000;Kanazawa and Funk, 2001;and Goff, McCormick and Tollison, 2002), efficiency of the betting market (Zuber, Gandar and Bowers, 1985;Sauer, Brajer, Ferris and Marr, 1988;Golec and Tamarkin, 1991;Dixon and Coles, 1997;and Gray and Gray, 1997), comparison of betting markets and financial markets (Levitt, 2004), the effect of labor strikes on consumer demand (Schmidt and Berri, 2004), preferences under risk (Julien and Salanié, 2000), mixed strategy equilibria Wooders, 2000, 2001;Chiappori, Levitt and Groseclose, 2002;and PalaciosHuerta and Volij, 2008), incentive effects (Ehrenberg and Bognanno, 1990), rationality (Gandar, Zuber, O'Brian and Russo, 1988), optimal labor contracts (Lazear and Rosen, 1981), control of externalities (Carlton, Frankel and Landes, 2004), favoritism (Garicano, Palacios-Huerta and Prendergast, 2005), maximizing behavior of firms (Romer, 2006;and Adams, 2006), and so on.…”

Section: Introductionmentioning

confidence: 99%

The efficiency of top agents: An analysis through service strategy in tennis

Klaassen

Magnus

2009

Journal of Econometrics

View full text Add to dashboard Cite

We consider the question whether top tennis players in a top tournament (Wimbledon) employ an optimal (efficient) service strategy. While we show that top players do not, in general, follow an optimal strategy, our principal result is that the estimated inefficiencies are not large: the inefficiency regarding winning a point on service is on average 1.1% for men and 2.0% for women, implying that–by adopting an efficient service strategy–players can (on average) increase the probability of winning a match by 2.4%-points for men and 3.2%-points for women. While the inefficiencies may seem small, the financial consequences for the efficient player at Wimbledon can be substantial: the expected paycheck could rise by 18.7% for men and even by 32.8% for women. We use these findings to shed some light on the question of whether economic agents are successful optimizers

show abstract

The degree of inefficiency in the football betting market Statistical tests

Cited by 134 publications

References 20 publications

Intuitive confidence: Choosing between intuitive and nonintuitive alternatives.

Intuitive confidence: Choosing between intuitive and nonintuitive alternatives.

How efficient is the European football betting market? Evidence from arbitrage and trading strategies

The efficiency of top agents: An analysis through service strategy in tennis

Contact Info

Product

Resources

About