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Parimutuel betting on the eSports duels: Evidence of the reverse favourite-longshot bias

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  • Dagaev, Dmitry
  • Stoyan, Egor

Abstract

We analyse betting behaviour patterns of the visitors of the specialized betting website dedicated to the popular eSports game Counter-Strike: Global Offensive. The reverse favourite-longshot bias is found, which is rather unusual for parimutuel betting markets, where favourite-longshot bias is more common. We define simple betting strategies based on the bets on underdogs and show that these strategies make a sufficiently large positive profit both on the in-sample and out-of-sample datasets, which is a sign of market inefficiency. In matches with popular underdogs, the sentiment bias decreases the market inefficiency caused by the reverse favourite-longshot bias. At the same time, the role of the geographical location of teams in the reverse favourite-longshot bias is only marginal.

Suggested Citation

  • Dagaev, Dmitry & Stoyan, Egor, 2020. "Parimutuel betting on the eSports duels: Evidence of the reverse favourite-longshot bias," Journal of Economic Psychology, Elsevier, vol. 81(C).
  • Handle: RePEc:eee:joepsy:v:81:y:2020:i:c:s0167487020300660
    DOI: 10.1016/j.joep.2020.102305
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