 Betting market inefficiencies are short-lived in German professional footballChristian Deutscher, Bernd Frick and Marius Ötting Applied Economics, 2018, vol. 50, issue 30, 3240-3246 Abstract: In this article, we argue that potential inefficiencies on betting markets are more likely to exist at the very beginning of a season, when the available information on the teams’ playing strength is difficult to evaluate. This lack of reliable information should be particularly large in the case of recently promoted teams that have typically undergone major changes in the composition of their roster following their promotion. Without any information on the latter teams’ potential performance, they are particularly difficult to evaluate, which may eventually lead to inefficiencies and positive returns on investment in the betting market. We analyse odds from German first division Bundesliga soccer for the seasons from 2002/03 to 2015/16 to find betting market inefficiencies at the start of the season. As expected, betting on recently promoted team wins generates temporarily positive returns, especially for away games. These results suggest bookmakers to underestimate promoted teams’ ability to familiarize with the conditions in the new league, such as having to play in front of larger, often hostile crowds. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:50:y:2018:i:30:p:3240-3246 Ordering information: This journal article can be ordered from DOI: 10.1080/00036846.2017.1418082 Access Statistics for this article Applied Economics is currently edited by Anita Phillips More articles in Applied Economics from Taylor & Francis Journals |
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