Chance or Ability? The Efficiency of the Football Betting Market Revisited

Luca Rebeggiani and Johannes Gross

VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy from Verein für Socialpolitik / German Economic Association

Abstract: The extent of market efficiency induced by rational behaviour of market participants is central for economic research. Many economists have already examined sports-betting markets as a laboratory to better understand trading behaviour and efficiency of stock prices while avoiding to jointly test the hypothesis of a correct capital market model. The following paper will investigate whether the European football betting market fulfils the efficiency paradigm introduced by Fama (1970) with a unique dataset allowing for an investigation of the German betting market in view of its regulatory changes recently. The analysis contributes to the literature by conducting a variety of empirical strategy including rational expectation frameworks and an ordered choice model to stress the ex post market performance from a weak and semi-strong form perspective. In view of existing market distortions as taxes, switching costs of changing betting providers and limitation in competition, the results of the analysis are indicative of a rational market equilibrium surprisingly close to the efficiency benchmark.1

Keywords: Gambling; Sports Betting; Market Efficiency (search for similar items in EconPapers)
JEL-codes: G14 L83 Z2 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-spo and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Chance or Ability? The Efficiency of the Football Betting Market Revisited (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc18:181563

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