What Causes the Favorite-Longshot Bias? Further Evidence from Tennis

Jiří Lahvička

MPRA Paper from University Library of Munich, Germany

Abstract: In sports betting markets, bets on favorites 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 favorite-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.

Keywords: favorite-longshot bias; tennis; sports betting; market efficiency (search for similar items in EconPapers)
JEL-codes: G14 L83 (search for similar items in EconPapers)
Date: 2013-06-30
New Economics Papers: this item is included in nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: What causes the favourite-longshot bias? Further evidence from tennis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:47905

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