Do betting costs explain betting biases?
This paper investigates the reason why expected returns to identical bets placed at different odds vary significantly and systematically from one another. It is hypothesized that the cause is the existence for bettors of positive transactions costs. Two different arenas, fixed odds and spread betting markets, distinguished by different levels of transactions costs, are identified which offer competing bets about similar outcomes. The bias is examined in each arena and compared. Our results lend support to the hypothesis that the incidence of transactions costs on the bettor is at least a contributory factor in explaining the bias observed against bets placed at higher odds.
Year of publication: |
1998
|
---|---|
Authors: | Paton, David ; Williams, Leighton Vaughan |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 5.1998, 5, p. 333-335
|
Publisher: |
Taylor & Francis Journals |
Saved in:
freely available
Saved in favorites
Similar items by person
-
The growth of gambling and prediction markets : economic and financial implications
Paton, David, (2009)
-
Productivity measurement in gambling : plant-level evidence from the United Kingdom
Paton, David, (2010)
-
Gambling, prediction markets and public policy
Paton, David, (2010)
- More ...