Anyone for tennis (betting)?

Forrest, DK and Mchale, I 2007, 'Anyone for tennis (betting)?' , The European Journal of Finance, 13 (8) , pp. 751-768.

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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.

Item Type: Article
Themes: Subjects outside of the University Themes
Schools: Schools > Salford Business School > Salford Business School Research Centre
Journal or Publication Title: The European Journal of Finance
Publisher: Taylor & Francis
Refereed: Yes
ISSN: 1351-847X
Depositing User: Professor Ian G. McHale
Date Deposited: 05 Oct 2011 10:57
Last Modified: 16 Feb 2022 12:33

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