Bettors’ reaction to match dynamics: Evidence from in-game betting

Rouven Michels, Marius Ötting and Roland Langrock

European Journal of Operational Research, 2023, vol. 310, issue 3, 1118-1127

Abstract: It is still largely unclear to what extent bettors update their prior assumptions about the strength and form of competing teams considering the dynamics during the match. This is of interest not only from the psychological perspective, but also as the pricing of live odds ideally should be driven both by the (objective) outcome probabilities and also the bettors’ behaviour. Using state-space models (SSMs) to account for the dynamically evolving latent sentiment of the betting market, we analyse a unique high-frequency data set on stakes placed during the match. We find that stakes in the live-betting market are driven both by perceived pre-game strength and by in-game strength, the latter as measured by the Valuing Actions by Estimating Probabilities (VAEP) approach. Both effects vary over the course of the match.

Keywords: OR in sports; Live betting; State-space model; Stochastic volatility; Time series analysis (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:310:y:2023:i:3:p:1118-1127

DOI: 10.1016/j.ejor.2023.04.006

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