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Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting Market

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  • Masahiro Ashiya

    (Graduate School of Economics, Kobe University)

Abstract

This paper finds that arbitrage was possible in two out of 175 Japanese thoroughbred races even after taking account of (a) the size of the minimum betting unit and (b) the negative effect of arbitrage on the odds. The guaranteed profits in these two races were 5,120 yen (about $64) and 340 yen.

Suggested Citation

  • Masahiro Ashiya, 2013. "Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting Market," Discussion Papers 1301, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:1301
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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2013/1301.pdf
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    References listed on IDEAS

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    1. Egon Franck & Erwin Verbeek & Stephan Nüesch, 2013. "Inter-market Arbitrage in Betting," Economica, London School of Economics and Political Science, vol. 80(318), pages 300-325, April.
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    7. Shin, Hyun Song, 1993. "Measuring the Incidence of Insider Trading in a Market for State-Contingent Claims," Economic Journal, Royal Economic Society, vol. 103(420), pages 1141-1153, September.
    8. Hausch, Donald B & Ziemba, William T, 1990. "Arbitrage Strategies for Cross-Track Betting on Major Horse Races," The Journal of Business, University of Chicago Press, vol. 63(1), pages 61-78, January.
    9. 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.
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    Cited by:

    1. Isabel Abinzano & Luis Muga & Rafael Santamaria, 2017. "Behavioral Biases Never Walk Alone," Journal of Sports Economics, , vol. 18(2), pages 99-125, February.

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