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Information and efficiency: an empirical study of a fixed odds betting market

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  • Tim Kuypers

Abstract

The efficiency of the fixed odds betting market for football in England is investigated. It is the efficiency of how market participants utilize available information that is tested. A model of bookmaker behaviour is presented in which the bookmaker maximizes their expected share of the total amount bet. It is found that an expected profit maximizing bookmaker could set market inefficient odds. Several empirical tests using the ordered probit model with data on prices and publicly available information are carried out. Evidence of market inefficiency is identified offering profitable betting opportunities.

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  • Tim Kuypers, 2000. "Information and efficiency: an empirical study of a fixed odds betting market," Applied Economics, Taylor & Francis Journals, vol. 32(11), pages 1353-1363.
    • Handle: RePEc:taf:applec:v:32:y:2000:i:11:p:1353-1363
    DOI: 10.1080/00036840050151449
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    References listed on IDEAS

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