This paper concludes that a market for state-contingent claims (UK horserace betting) displays evidence of pervasive but heterogeneous forms of inefficiency, in significant contrast to earlier investigations. Using hitherto unavailable data, comparison of notional returns implicit in parallel sets of bookmaker and parimutuel odds identifies inefficiency in terms of zones of distinct but contrasting forms of cross-market returns differential. The inefficiency is rationalized in terms of both buyer and supplier behaviour; its durability is explained in terms of limited arbitrage opportunities. Copyright 2001 by Taylor and Francis Group
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Article provided by Taylor and Francis Journals in its journal Applied Economics.
Volume (Year): 33 (2001) Issue (Month): 13 (October) Pages: 1751-54 Download reference. The following formats are available: HTML
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