Parimutuel betting on the eSports duels: Evidence of the reverse favourite-longshot bias

Dmitry Dagaev and Egor Stoyan

Journal of Economic Psychology, 2020, vol. 81, issue C

Abstract: We analyse betting behaviour patterns of the visitors of the specialized betting website dedicated to the popular eSports game Counter-Strike: Global Offensive. The reverse favourite-longshot bias is found, which is rather unusual for parimutuel betting markets, where favourite-longshot bias is more common. We define simple betting strategies based on the bets on underdogs and show that these strategies make a sufficiently large positive profit both on the in-sample and out-of-sample datasets, which is a sign of market inefficiency. In matches with popular underdogs, the sentiment bias decreases the market inefficiency caused by the reverse favourite-longshot bias. At the same time, the role of the geographical location of teams in the reverse favourite-longshot bias is only marginal.

Keywords: Reverse favourite-longshot bias; Market inefficiency; eSports; Betting (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:81:y:2020:i:c:s0167487020300660

DOI: 10.1016/j.joep.2020.102305

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