Regression Tests and the Efficiency of Fixed Odds Betting Markets

Ruud Koning

International Journal of Sport Finance, 2012, vol. 7, issue 3, 262-274

Abstract: The informational content of odds posted in sports betting market has been an ongoing topic of research. In this paper, I test whether fixed odds betting markets in soccer are informationally efficient. The contributions of the paper are threefold: first, I propose a simple yet flexible statistical test to assess efficiency. Second, this test is applied to fixed odds betting markets in 10 different countries, and multiple seasons. Thereby, the empirical scope of the paper is much wider than that of research published so far. Finally, I examine significance of one variable that has received little attention in the literature so far: returns on earlier bets of the contestants.

Keywords: fixed odds betting; logic model; informational efficiency (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2012
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International Journal of Sport Finance is currently edited by Arne Feddersen, Babatunde Buraimo, Joachim Prinz and Jane Ruseski

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