nep-spo New Economics Papers
on Sports and Economics
Issue of 2019‒02‒25
two papers chosen by
Humberto Barreto
DePauw University

  1. Staking plans in sports betting under unknown true probabilities of the event By Barge-Gil, Andrés; García-Hiernaux, Alfredo
  2. The role of boards' misperceptions in the relation between managerial turnover and performance: Evidence from European football By Raphael Flepp; Egon Franck

  1. By: Barge-Gil, Andrés; García-Hiernaux, Alfredo
    Abstract: Kelly staking method has been shown to maximize long-term growth of bankroll. However, it demands for the estimation of the true probabilities for each event. As a result many sport tipsters have abandoned this staking method and opted for a flat staking plan ('unit loss') or, less frequently, an 'unit win' plan. We analyze under which assumptions these methods correspond to the Kelly staking method and propose a different staking plan: 'unit impact,' under the hypothesis that this plan fits better with the Kelly staking method. We test our predictions using a betting database from Pyckio, one of the most popular tipster platforms in the world. Results show empirical support for our hypothesis.
    Keywords: sports betting; Kelly criterion; staking methods; tipster;
    JEL: D81 G11 L83
    Date: 2019–02–15
  2. By: Raphael Flepp (Department of Business Administration, University of Zurich); Egon Franck (Department of Business Administration, University of Zurich)
    Abstract: In this paper, we account for boards’ misperceptions when replacing a top manager by differentiating between managerial turnovers following actual poor performance and managerial turnovers following seemingly poor performance due to bad luck in order to investigate their subsequent effects on performance. We focus on managerial changes within football organizations and analyze dismissals from the top European leagues. To account for the mean reversion of performance, we create a control group of non-dismissals using the nearest neighbor approach. To account for boards’ misperceptions, we differentiate between dismissals and non-dismissals that occur either due to poor playing performance on the pitch or due to a sequence of bad luck, which is measured using "expected goals". We find that dismissals after poor playing performance on the pitch increase subsequent performance, while dis-missals after a series of bad luck do not. Our results have important implications regarding the design of future turnover studies and the costs of boards’ ineffective turnover decisions.
    Keywords: football, managerial turnover, performance, football
    JEL: J44 L83
    Date: 2019–01

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