Measuring the Extent of Inside Trading in Horse Betting Markets

Adi Schnytzer (), Martien Lamers and Vasiliki Makropoulou ()
Additional contact information
Adi Schnytzer: Department of Economics, Bar Ilan University
Vasiliki Makropoulou: Utrecht School of Economics, Utrecht University

No 2009-10, Working Papers from Bar-Ilan University, Department of Economics

Abstract: This paper develops a theoretical model that examines the optimal price setting by on-course bookmakers in the racetrack betting market. The model suggests that opening prices should include a premium that compensates bookmakers for the risk that insiders will account for private information and exploit any mis-pricing made by the bookmakers. The model is an extension of the model developed by Makropoulou and Markellos (2007) for football betting to the racetrack betting market. Using an extensive dataset and performing Monte Carlo simulations to calculate the potential value of new information, we measure insider trading in the Australian racetrack betting market.

Date: 2009-04
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www2.biu.ac.il/soc/ec/wp/2009-10.pdf Working paper (application/pdf)

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:biu:wpaper:2009-10

Access Statistics for this paper

More papers in Working Papers from Bar-Ilan University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Department of Economics ().