 Anyone for Tennis (Betting)?David Forrest and Ian Mchale The European Journal of Finance, 2007, vol. 13, issue 8, 751-768 Abstract: The most robust anomaly noted in the literature on wagering markets is (positive) longshot bias: over a period of 50 years, it has been well documented in horse betting that higher expected returns accrue to short- than to long-odds bets. However, a few examples of betting markets with zero or negative bias have been found, for example in certain American sports. The understanding of longshot bias is likely to be informed by comparing and contrasting conditions in markets displaying positive, zero, and negative bias but, to date, relatively few markets have been examined. This paper employs a large data set on professional men's tennis matches and a new econometric approach to the estimation of the relationship between returns and odds. It finds positive bias throughout the range of odds. It discusses this finding in the context of the debate on why biases exist and persist in wagering markets, focusing particularly on bettors' attitudes towards risk and skewness. Keywords: Sports betting; longshot bias; risk preference (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:13:y:2007:i:8:p:751-768 Ordering information: This journal article can be ordered from DOI: 10.1080/13518470701705736 Access Statistics for this article The European Journal of Finance is currently edited by Chris Adcock More articles in The European Journal of Finance from Taylor & Francis Journals |
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