Game, set and match: the favorite long-shot bias in tennis betting exchanges
Fecha
2016Versión
Acceso abierto / Sarbide irekia
Tipo
Artículo / Artikulua
Versión
Versión aceptada / Onetsi den bertsioa
Impacto
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10.1080/13504851.2015.1093074
Resumen
We test for the existence of Favorite-Longshot Bias (FLB) in tennis betting exchanges. Despite these being order-driven markets, with no direct participation from bookmakers, we have found very similar results to those obtained by Lahvička (2014) for bookmakers’ betting markets: the bias is stronger in matches between lower ranked players, in later round matches and in high profile tournaments. T ...
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We test for the existence of Favorite-Longshot Bias (FLB) in tennis betting exchanges. Despite these being order-driven markets, with no direct participation from bookmakers, we have found very similar results to those obtained by Lahvička (2014) for bookmakers’ betting markets: the bias is stronger in matches between lower ranked players, in later round matches and in high profile tournaments. This suggests that bookmakers’ adjustments to respond to informed betting are not the main driver of FLB. The varying magnitude of the bias across different types of event in the main market also weakens arguments linking FLB to gamblers’ risk preferences, and suggests the need to consider the microstructure features of the market together with the cognitive biases highlighted in the behavioral finance literature. [--]
Materias
Favorite longshot bias,
Sports betting exchanges,
Microstructure,
Market efficiency
Editor
Taylor & Francis
Publicado en
Applied Economics Letters, 2016, vol. 23, no. 8, 605–608
Notas
This is an accepted manuscript of an article published by Taylor & Francis in Applied Economics Letters on May 2016, available online: http://dx.doi.org/10.1080/13504851.2015.1093074
Departamento
Universidad Pública de Navarra. Departamento de Gestión de Empresas /
Nafarroako Unibertsitate Publikoa. Enpresen Kudeaketa Saila
Versión del editor
Entidades Financiadoras
This article has received financial support from the Spanish
Ministry of Economy and Competitiveness [ECO2012-
35946-C02-01]. Isabel Abinzano particularly acknowledges
the financial support of the Andalusian Regional
Government [P12-SEJ-1713].