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- Title
The favorite-longshot bias and the impact of experience.
- Authors
Feess, Eberhard; Müller, Helge; Schumacher, Christoph
- Abstract
With a unique data set from New Zealand which allows us to assign each bet to individual bettors, we analyze the impact of experience on behavior and success in non-parimutuel (fixed odds) sports betting markets. We find that experienced bettors bet more on favorites than inexperienced bettors do. Average returns, which we use as success measure, increase with experience even after controlling for odds. This means that the higher return of experienced bettors cannot only be attributed to betting more on favorites. To get a more detailed picture, we divide the data set into ten equally large subgroups, sorted by experience. We find that odds decrease from subgroup to subgroup, while success consistently increases. This shows that the positive impact of experience is not mainly driven by professional bettors.
- Subjects
ECONOMIC impact; SPORTS betting; DATA analysis; BEHAVIORAL economics; FINANCIAL markets
- Publication
Business Research, 2014, Vol 7, Issue 2, p217
- ISSN
1866-8658
- Publication type
Article
- DOI
10.1007/s40685-014-0013-9