Oikonomidis, Anastasios and Johnson, Johnnie
Subjective judgement vs. market idiosyncasies: exploriong influences on the favourite longshot bias in European betting markets
At 24th European Conference on Operational Research, Portugal.
11 - 14 Jul 2010.
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A dataset of 55,880 football events is analyzed to explore the favourite longshot bias in the bookmaker betting market. Limited dependent variable modelling of game outcomes is employed to identify sources of variation in the observed bias. It is concluded that it is consistently expressed through time, but varies significantly across leagues. It is shown that the bias is caused by bookmakers offering better odds for popular bets in order to increase their customer basis. Finally, it is proved that league specific fundamental information causes variation in the magnitude of the bias.
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