Information, prices and efficiency in an online betting market

Guy Elaad (), J Reade and Carl Singleton
Additional contact information
Guy Elaad: Department of Economics and Business Management, Ariel University

No em-dp2019-10, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: We contribute to the discussion on betting market efficiency by studying the odds (or prices) set by fifty-one online bookmakers, for the result outcomes in over 16,000 association football matches in England since 2010. Adapting a methodology typically used to evaluate forecast efficiency, we test the Efficient Market Hypothesis in this context. We find odds are generally not biased when compared against actual match outcomes, both in terms of favourite-longshot or outcome types. But individual bookmakers are not efficient. Their own odds do not appear to use fully the information contained in their competitors' odds.

Keywords: prediction markets; Efficient Market Hypothesis; favourite-longshot bias; forecast efficiency (search for similar items in EconPapers)
JEL-codes: C53 G14 Z29 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2019-04-01
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 (2)

Published in Finance Research Letters, 2020, 35, https://doi.org/10.1016/j.frl.2019.09.006

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Journal Article: Information, prices and efficiency in an online betting market (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rdg:emxxdp:em-dp2019-10

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