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Information and price efficiency in the absence of home crowd advantage

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  • Tadgh Hegarty

Abstract

This paper evaluates the efficiency of betting market pricing for top league soccer matches played behind closed doors during the COVID-19 pandemic. The removal of the crowd component of home advantage results in substantial improvement in both the market predictions of goal difference and home team wins.

Suggested Citation

  • Tadgh Hegarty, 2021. "Information and price efficiency in the absence of home crowd advantage," Applied Economics Letters, Taylor & Francis Journals, vol. 28(21), pages 1902-1907, December.
    • Handle: RePEc:taf:apeclt:v:28:y:2021:i:21:p:1902-1907
    DOI: 10.1080/13504851.2021.1883525
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    References listed on IDEAS

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    1. Angelini, Giovanni & De Angelis, Luca, 2019. "Efficiency of online football betting markets," International Journal of Forecasting, Elsevier, vol. 35(2), pages 712-721.
    2. Fischer, Kai & Haucap, Justus, 2020. "Betting market efficiency in the presence of unfamiliar shocks: The case of ghost games during the COVID-19 pandemic," DICE Discussion Papers 349, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    3. Fischer, Kai & Haucap, Justus, 2020. "Does crowd support drive the home advantage in professional soccer? Evidence from German ghost games during the COVID-19 pandemic," DICE Discussion Papers 344, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    4. Christian Deutscher & David Winkelmann & Marius Otting, 2020. "Bookmakers' mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break," Papers 2008.05417, arXiv.org, revised Aug 2020.
    5. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    6. Thaler, Richard H & Ziemba, William T, 1988. "Parimutuel Betting Markets: Racetracks and Lotteries," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 161-174, Spring.
    7. Guy Elaad, 2020. "Home-field advantage and biased prediction markets in English soccer," Applied Economics Letters, Taylor & Francis Journals, vol. 27(14), pages 1170-1174, July.
    8. Sung, Ming-Chien & Johnson, Johnnie E.V. & McDonald, David C.J., 2016. "Informed trading, market efficiency and volatility," Economics Letters, Elsevier, vol. 149(C), pages 56-59.
    9. Pope, Peter F & Peel, David A, 1989. "Information, Prices and Efficiency in a Fixed-Odds Betting Market," Economica, London School of Economics and Political Science, vol. 56(223), pages 323-341, August.
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    Cited by:

    1. Whelan, Karl & Hegarty, Tadgh, 2023. "Forecasting Soccer Matches With Betting Odds: A Tale of Two Markets," MPRA Paper 116925, University Library of Munich, Germany.
    2. Rui Matos & Diogo Monteiro & Raul Antunes & Diogo Mendes & João Botas & João Clemente & Nuno Amaro, 2021. "Home-Advantage during COVID-19: An Analysis in Portuguese Football League," IJERPH, MDPI, vol. 18(7), pages 1-8, April.
    3. 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.
    4. Carl Singleton & Alex Bryson & Peter Dolton & James Reade & Dominik Schreyer, 2022. "Economics lessons from sports during the COVID-19 pandemic," Chapters, in: Paul M. Pedersen (ed.), Research Handbook on Sport and COVID-19, chapter 2, pages 9-18, Edward Elgar Publishing.
    5. Pascal Flurin Meier & Raphael Flepp & Egon Franck, 2021. "Are sports betting markets semistrong efficient? Evidence from the COVID-19 pandemic," Working Papers 387, University of Zurich, Department of Business Administration (IBW).

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