There have been many attempts, theoretical and empirical, to explain the persistence of a favorite-longshot bias in … a misperceptions of probability approach in line with prospect theory over a neoclassical approach of the Quandt (1986 … model used fails to allow for the existence of horse betting markets which either display no such bias (or a reverse bias …

This paper examines whether the outcome bias harms price efficiency in betting exchange markets. In soccer, the match … overstated for previously lucky teams and understated for previously unlucky teams. Consistent with the outcome bias, the betting … community overestimates the importance of past match outcomes. Consequently, this bias translates into significantly negative …