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PARIMUTUEL BETTING ON THE ESPORTS DUELS: REVERSE FAVOURITE-LONGSHOT BIAS AND ITS DETERMINANTS

Dmitry Dagaev and Egor Stoyan ()
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Egor Stoyan: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: We analyse betting behaviour patterns of the visitors of the specialized betting website dedicated to the popular eSports game Counter-Strike: Global O ensive. The reverse favourite-longshot bias is found both in the in-sample and out-of-sample datasets. This phenomenon is rather unusual for parimutuel betting markets because favourite-longshot bias is more common. We de ne simple betting strategies based on the bets on underdogs and show that these strategies make a suciently large positive pro t, which is a sign of market ineciency. Next, we investigate determinants of the reverse favourite-longshot bias. We hypothesize that popular teams attract more unsophisticated gamblers which adds to the stronger reverse favourite-longshot bias in matches with such teams. Geographical proximity is found to be a signi cant factor that increases the bias, whereas the e ect of internet popularity measured by the number of team players' followers on Twitter surprisingly follows the U-shape curve

Keywords: eSports; betting; market ineciency; favourite-longshot bias. (search for similar items in EconPapers)
JEL-codes: G14 Z23 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2019
New Economics Papers: this item is included in nep-pay and nep-spo
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Published in WP BRP Series: Economics / EC, July 2019, pages 1-17

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:216/ec/2019

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