EconPapers    
Economics at your fingertips  
 

Semi-strong inefficiency in the fixed odds betting market: Underestimating the positive impact of head coach replacement in the main European soccer leagues

Giovanni Bernardo (), Massimo Ruberti and Roberto Verona

The Quarterly Review of Economics and Finance, 2019, vol. 71, issue C, 239-246

Abstract: In this paper we analyse the efficiency of the sports betting market, seeking to ascertain whether the market is efficient in the case of fixed odds provided by bookmakers in the four major European soccer leagues under the semi-strong efficiency hypothesis. By examining the trends of odds in the event of a major change in expectations about team results, i.e. when the head coach of a team is replaced, we attempt to verify the argument that a profitable strategy for the bettor is likely to be possible. In this case, the market under consideration would be inefficient. Analysing the average effect of head coach replacement, we find a positive impact on team performance. Based on this information, we build a betting strategy to find out whether the bookmakers’ odds absorb this change in expectations about the winning probability of involved teams. Comparing our strategy result with a distribution generated in a Monte Carlo experiment, we conclude that the betting market is inefficient in its semi-strong form.

Keywords: Sports betting market; Fixed-odds bets; Semi-strong efficiency hypothesis; Monte Carlo experiment (search for similar items in EconPapers)
JEL-codes: C12 D43 L83 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1062976917304167
Full text for ScienceDirect subscribers only

Related works:
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:quaeco:v:71:y:2019:i:c:p:239-246

Access Statistics for this article

The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty

More articles in The Quarterly Review of Economics and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-11-02
Handle: RePEc:eee:quaeco:v:71:y:2019:i:c:p:239-246