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Chance or ability? The efficiency of the football betting market revisited

 
: Groß, Johannes; Rebeggiani, Luca

:
Volltext urn:nbn:de:0011-n-4972237 (539 KByte PDF)
MD5 Fingerprint: 3e39540a7b2d23f2645a28f20385fea4
Erstellt am: 22.6.2018


Sankt Augustin, 2018, II, 56 S.
MPRA Paper, 87230
Englisch
Studie, Elektronische Publikation
Fraunhofer FIT ()
sports betting; Gambling; market efficiency; sports economics; market regulation

Abstract
The extent of market efficiency induced by rational behaviour of market participants is central for economic research. Many economists have already examined sports-betting markets as a laboratory to better understand trading behaviour and efficiency of stock prices while avoiding to jointly test the hypothesis of a correct capital market model. The following paper will investigate whether the European football betting market fulfils the efficiency paradigm introduced by Fama (1970) with a unique dataset allowing for an investigation of the German betting market in view of its regulatory changes recently. The analysis contributes to the literature by conducting a variety of empirical strategy including rational expectation frameworks and an ordered choice model to stress the ex post market performance from a weak and semi-strong form perspective. In view of existing market distortions as taxes, switching costs of changing betting providers and limitation in competition, the results of the analysis are indicative of a rational market equilibrium surprisingly close to the efficiency benchmark.

: http://publica.fraunhofer.de/dokumente/N-497223.html