A Profitable Strategy in the Pelota Betting Market
In Pelota matches, games with two mutually exclusive and exhaustive outcomes, bets on the winner are made between viewers through a middleman who receives 16% of the finally paid amount. In this paper after the description of the way bets are made in the market we analyze what we call the general odds rule. Analyzing the way odds are fixed in the market we find that assuming equal return on bets there are biases in the market. Moreover, we find profitable betting strategies even taking commissions into account.
|Date of creation:||2006|
|Date of revision:|
|Publication status:||Published in|
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- Loreto Llorente & Josemari Aizpurua, 2006. "A BETTING MARKET: Description and a theoretical explanation of bets in Pelota Matches," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0603, Departamento de Economía - Universidad Pública de Navarra.
- Michael A. Smith & David Paton & Leighton Vaughan Williams, 2006. "Market Efficiency in Person-to-Person Betting," Economica, London School of Economics and Political Science, vol. 73(292), pages 673-689, November.
- Dowie, Jack A, 1976. "On the Efficiency and Equity of Betting Markets," Economica, London School of Economics and Political Science, vol. 43(17), pages 139-50, May.
- Williams, Leighton Vaughan & Paton, David, 1997. "Why Is There a Favourite-Longshot Bias in British Racetrack Betting Markets?," Economic Journal, Royal Economic Society, vol. 107(440), pages 150-58, January.
- Woodland, Linda M & Woodland, Bill M, 1994. " Market Efficiency and the Favorite-Longshot Bias: The Baseball Betting Market," Journal of Finance, American Finance Association, vol. 49(1), pages 269-79, March.
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