Risk aversion and favourite–longshot bias in a competitive fixed‐odds betting market

Dados Bibliográficos

ID9727776
AutoresKarl Whelan (0000-0002-4831-5269, University College Dublin, autor correspondente)
Ano2024
Volume91
Fascículo361
Páginas188-209
Data de publicação2024-01-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoEconomica (JOURNAL)
Identificadores do periódicoISSN: 0013-0427 • E-ISSN: 1468-0335
EditoraWiley (PUBLISHER • GB)
DOI10.1111/ecca.12500
OpenAlexW4387816108
IdiomaEN
Referências citadas26

Research on sports betting has generally found a favourite–longshot bias: bets on longshots lose more than bets on favourites. Existing research focuses largely on pari‐mutuel betting, but favourite–longshot bias is also evident in fixed‐odds online betting markets of the type that are growing rapidly around the world. Explanations for this bias in previous work on pari‐mutuel markets cannot explain why it would be a feature of competitive fixed‐odds betting markets. We show how disagreement among gamblers and risk aversion on the part of bookmakers in a competitive market can produce a pattern of favourite–longshot bias resembling the empirical evidence

Econometrics · Economics · Expected utility hypothesis · Favourite · Financial economics · Odds · Political science · Risk aversion (psychology) · Statistics · Decision-Making and Behavioral Economics · Gambling Behavior and Treatments · Mathematics · Sports Analytics and Performance