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Does transparency imply efficiency? The case of the European soccer betting market

Author

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  • Oikonomidis, Anastasios
  • Bruce, Alistair C.
  • Johnson, Johnnie E.V.

Abstract

We discover mispricing in an apparently transparent market — the European soccer betting market. Efficiency differences between countries are accounted for by variations in league competitiveness. We conclude that barriers to efficiency (e.g., risk evaluation problems) may remain in transparent markets.

Suggested Citation

  • Oikonomidis, Anastasios & Bruce, Alistair C. & Johnson, Johnnie E.V., 2015. "Does transparency imply efficiency? The case of the European soccer betting market," Economics Letters, Elsevier, vol. 128(C), pages 59-61.
    • Handle: RePEc:eee:ecolet:v:128:y:2015:i:c:p:59-61
    DOI: 10.1016/j.econlet.2015.01.015
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    References listed on IDEAS

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    1. Erik Brynjolfsson & Michael D. Smith, 2000. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Management Science, INFORMS, vol. 46(4), pages 563-585, April.
    2. Williams, Leighton Vaughan & Paton, David, 1997. "Why Is There a Favourite-Longshot Bias in British Racetrack Betting Markets?," Economic Journal, Royal Economic Society, vol. 107(440), pages 150-158, January.
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    Cited by:

    1. Kai Fischer & Justus Haucap, 2020. "Betting Market Efficiency in the Presence of Unfamiliar Shocks: The Case of Ghost Games during the Covid-19 Pandemic," CESifo Working Paper Series 8526, CESifo.
    2. Kai Fischer & Justus Haucap, 2022. "Home advantage in professional soccer and betting market efficiency: The role of spectator crowds," Kyklos, Wiley Blackwell, vol. 75(2), pages 294-316, May.
    3. Goto, Shingo & Yamada, Toru, 2023. "What drives biased odds in sports betting markets: Bettors’ irrationality and the role of bookmakers," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 252-270.
    4. Franke, Maximilian, 2020. "Do market participants misprice lottery-type assets? Evidence from the European soccer betting market," The Quarterly Review of Economics and Finance, Elsevier, vol. 75(C), pages 1-18.
    5. Salvatore Caruso & Giuseppe Pernagallo, 2021. "On the efficiency of online soccer betting markets: a new methodology based on symbolic series," Economics Bulletin, AccessEcon, vol. 41(3), pages 1451-1460.

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    More about this item

    Keywords

    Efficiency; Transparent market; Favourite-longshot bias;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets

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