nep-spo New Economics Papers
on Sports and Economics
Issue of 2013‒07‒05
one paper chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. What Causes the Favorite-Longshot Bias? Further Evidence from Tennis By Lahvicka, Jiri

  1. By: Lahvicka, Jiri
    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
    JEL: G14 L83
    Date: 2013–06–30

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