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Betting Markets Efficiency: Evidence From European Football

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  • Bruno Deschamps

Abstract

This paper uses data from up to 79 bookmakers in any one match to analyze the efficiency of European football betting markets during the 2005/2006 season. We first examine the empirical derivatives of the longshot bias, and find that the bias is much more pronounced for high-grade matches. This arguably supports the information-based explanation of the longshot bias. We also show that internet betting, by giving access to a large number of bookmakers, improves significantly bettors' potential return. Finally, we find that average odds do not provide the best estimate of the likelihood of a result. Indeed, the best available odds are informative as well, even after controlling for the average odds.

Suggested Citation

  • Bruno Deschamps, 2008. "Betting Markets Efficiency: Evidence From European Football," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 2(1), pages 66-76, May.
  • Handle: RePEc:buc:jgbeco:v:2:y:2008:i:1:p:66-76
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    File URL: http://www.ubplj.org/index.php/jgbe/article/view/525
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    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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