Information, prices and efficiency in an online betting market

Guy Elaad, J Reade and Carl Singleton

Finance Research Letters, 2020, vol. 35, issue C

Abstract: We contribute to the discussion on betting market efficiency by studying the odds (or prices) set by fifty-one online bookmakers, for the result outcomes in over 16,000 association football matches in England since 2010. Adapting a methodology typically used to evaluate forecast efficiency, we test the Efficient Market Hypothesis in this context. We find odds are generally not biased when compared against actual match outcomes, both in terms of favourite-longshot or outcome types. But individual bookmakers are not efficient. Their own odds do not appear to use fully the information contained in their competitors’ odds.

Keywords: Prediction markets; Efficient market hypothesis; Favourite-longshot bias; Forecast efficiency (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612319306440
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Information, prices and efficiency in an online betting market (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:35:y:2020:i:c:s1544612319306440

DOI: 10.1016/j.frl.2019.09.006

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().