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Betting in the Shadow of Match-Fixing

Author

Listed:
  • Parimal Kanti Bag

    () (National University of Singapore)

  • Bibhas Saha

    () (School of Economics, University of East Anglia)

Abstract

Two bookmakers compete in Bertrand fashion while setting odds on the outcomes of a sporting contest where an influential punter (or betting syndicate) may bribe some player(s) to fix the contest. Zero profit and bribe prevention may not always hold together. When the influential punter is quite powerful, the bookies may coordinate on prices and earn positive profits for fear of letting the `lemons' (i.e., the influential punter) in. On the other hand, sometimes the bookies make zero profits but also admit match-fixing. When match-fixing occurs, it often involves bribery of only the strong team. The theoretical analysis is intended to address the problem of growing incidence of betting related corruption in world sports including cricket, horse races, tennis, soccer, basketball, wrestling, snooker, etc.

Suggested Citation

  • Parimal Kanti Bag & Bibhas Saha, 2010. "Betting in the Shadow of Match-Fixing," University of East Anglia Applied and Financial Economics Working Paper Series 011, School of Economics, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:aepppr:2010_11
    as

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    File URL: https://archive.uea.ac.uk/menu/depts/eco/research/RePEc/uea/papers_pdf/UEA-AFE-011.pdf
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    References listed on IDEAS

    as
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    5. Hyun Song Shin, 2008. "Prices Of State Contingent Claims With Insider Traders, And The Favourite-Longshot Bias," World Scientific Book Chapters,in: Efficiency Of Racetrack Betting Markets, chapter 34, pages 343-352 World Scientific Publishing Co. Pte. Ltd..
    6. Steven D. Levitt, 2004. "Why are gambling markets organised so differently from financial markets?," Economic Journal, Royal Economic Society, vol. 114(495), pages 223-246, April.
    7. Stefan Winter & Martin Kukuk, 2008. "Do horses like vodka and sponging? - On market manipulation and the favourite-longshot bias," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 75-87.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Sports betting; bookie; punters; corruption; match-fixing; lemons problem;

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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