What causes the favourite-longshot bias? Further evidence from tennis

Jiří Lahvička

Applied Economics Letters, 2014, vol. 21, issue 2, 90-92

Abstract: In sports betting markets, bets on favourites tend to have a higher expected value than bets on longshots. This article uses a data set of almost 45 000 professional single tennis matches to show that the favourite-longshot bias is much stronger in matches between lower-ranked players, in later-round matches and in high-profile tournaments. These results cannot be solely explained by bettors being locally risk-loving or overestimating chances of longshots, but are consistent with bookmakers protecting themselves against both better informed insiders and the general public exploiting new information.

Date: 2014
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Working Paper: What Causes the Favorite-Longshot Bias? Further Evidence from Tennis (2013)
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DOI: 10.1080/13504851.2013.842628

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