On the Implications of the Markowitz Model of Utility embodying Gain Seeking Preferences for Odds on Betting and Bookmakers choice of Spread or Odds Betting
We demonstrate in a parametric formulation of the Markowitz model of utility that unless agents are initially gain seeking they will not bet on heavily odds on favorites for a given negative expected rate of return. The model supports Sauer's (1998) observation that it may not be profitable to make a market in contests involving heavy odds on favorites with implications for bookmakers choice of spread or odds markets in sports betting.
Year of publication: |
2013-06-10
|
---|---|
Authors: | Peel, David Alan |
Published in: |
Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 33.2013, 2, p. 1420-1428
|
Publisher: |
AccessEcon |
Subject: | Markowitz model of utility | Gain seeking preferences | limits to odds on betting | bookmaker choice of spreads versus odds markets | lopsided contests |
Saved in:
freely available
Saved in favorites
Similar items by subject
-
On the Economics and Biology of Trust
Fehr, Ernst, (2008)
-
Siesta: A theory of freelancing
Saez Marti, Maria, (2011)
-
Disagreement and learning in a dynamic contracting model
Adrian, Tobias, (2006)
- More ...