In this paper we analyse the efficiency of the sports betting market, seeking to ascertain whether the market is efficient in the case of fixed odds provided by bookmakers in the four major European soccer leagues under the semi-strong efficiency hypothesis. By examining the trends of odds in the event of a major change in expectations about team results, i.e. when the head coach of a team is replaced, we attempt to verify the argument that a profitable strategy for the bettor is likely to be possible. In this case, the market under consideration would be inefficient. Analysing the average effect of head coach replacement, we find a positive impact on team performance. Based on this information, we build a betting strategy to find out whether the bookmakers’ odds absorb this change in expectations about the winning probability of involved teams. Comparing our strategy result with a distribution generated in a Monte Carlo experiment, we conclude that the betting market is inefficient in its semi-strong form.

Bernardo, G., Ruberti, M., Verona, R. (2019). Semi-strong inefficiency in the fixed odds betting market: Underestimating the positive impact of head coach replacement in the main European soccer leagues. THE QUARTERLY REVIEW OF ECONOMICS AND FINANCE: JOURNAL OF THE MIDWEST ECONOMICS ASSOCIATION, 71, 239-246 [10.1016/j.qref.2018.08.007].

Semi-strong inefficiency in the fixed odds betting market: Underestimating the positive impact of head coach replacement in the main European soccer leagues

Massimo Ruberti
;
2019

Abstract

In this paper we analyse the efficiency of the sports betting market, seeking to ascertain whether the market is efficient in the case of fixed odds provided by bookmakers in the four major European soccer leagues under the semi-strong efficiency hypothesis. By examining the trends of odds in the event of a major change in expectations about team results, i.e. when the head coach of a team is replaced, we attempt to verify the argument that a profitable strategy for the bettor is likely to be possible. In this case, the market under consideration would be inefficient. Analysing the average effect of head coach replacement, we find a positive impact on team performance. Based on this information, we build a betting strategy to find out whether the bookmakers’ odds absorb this change in expectations about the winning probability of involved teams. Comparing our strategy result with a distribution generated in a Monte Carlo experiment, we conclude that the betting market is inefficient in its semi-strong form.
Articolo in rivista - Articolo scientifico
Fixed-odds bets; Monte Carlo experiment; Semi-strong efficiency hypothesis; Sports betting market;
English
239
246
8
Bernardo, G., Ruberti, M., Verona, R. (2019). Semi-strong inefficiency in the fixed odds betting market: Underestimating the positive impact of head coach replacement in the main European soccer leagues. THE QUARTERLY REVIEW OF ECONOMICS AND FINANCE: JOURNAL OF THE MIDWEST ECONOMICS ASSOCIATION, 71, 239-246 [10.1016/j.qref.2018.08.007].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/356279
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