Informace o publikaci

To bet or not to bet: a reality check for tennis betting market efficiency



Rok publikování 2018
Druh Článek v odborném periodiku
Časopis / Zdroj Applied Economics
Fakulta / Pracoviště MU

Ekonomicko-správní fakulta

Obor Řízení, správa a administrativa
Klíčová slova Market efficiency; betting; Bradley-Terry model; data- snooping bias; tennis
Popis We present evidence that the tennis betting market appears to be much more efficient than suggested by previous studies. More specifically, we study the market efficiency by studying the forecasting performance of a diversified set of 40 betting rules in two ways: by searching for the existence of a return differential between betting rules and by analysing the profitability of betting rules. Even though individual tests provide evidence that, within our universe of betting rules, positive returns can be achieved, when data-snooping bias is taken into account, the evidence diminishes. Subsequently, we also find very little evidence of return differentials between betting rules. These results cast doubts on previous research as they suggest that when the potential detrimental effects of data-dreading are taken into account, betting markets in general might not, ultimately, be so inefficient.