What Causes the Favorite-Longshot Bias? Further Evidence from Tennis
نویسندگان
چکیده
منابع مشابه
The favorite-longshot bias and the impact of experience
With a unique data set from New Zealand which allows us to assign each bet to individual bettors, we analyze the impact of experience on behavior and success in non-parimutuel (fixed odds) sports betting markets. We find that experienced bettors bet more on favorites than inexperienced bettors do. Average returns, which we use as success measure, increase with experience even after controlling ...
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We propose a dynamic model of parimutuel betting that addresses the following three empirical regularities: a sizeable fraction of bets is placed early, late bets are more informative than early bets, and proportionally too many bets are placed on longshots. Exploiting a similarity with Cournot oligopoly, we show that bettors have an incentive to bet early when they are large and act on common ...
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In betting markets, the expected return on longshot bets tends to be systematically lower than on favorite bets. This favorite-longshot bias is a widely documented empirical fact, often perceived to be an important deviation from the market efficiency hypothesis. This chapter presents an overview of the main theoretical explanations for this bias proposed in the literature. ∗London Business Sch...
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Betting and prediction markets provide a natural environment for testing theories of decision making under uncertainty and price formation. The uncertainty about the value of the assets traded in these markets is resolved unambiguously, and the outcome is observed publicly. In most cases it is also reasonable to presume that the realized outcomes are exogenous with respect to market prices. In ...
متن کاملComplexity as a Guide to Understanding Decision Bias: A Contribution to the Favorite-Longshot Bias Debatey
This paper investigates the origins of a widespread decision bias in betting markets, the favorite-longshot bias (FLB); in particular, whether it is caused by cognitive errors on the part of bettors or by the pricing policies of bookmakers. The methodology is based on previous literature, which has suggested that: (i) races, as decision tasks for bettors, can be distinguished by their degree of...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2013
ISSN: 1556-5068
DOI: 10.2139/ssrn.2287335