Betting market inefficiencies are short-lived in German professional football

Deutscher, Christian; Frick, Bernd; Ötting, Marius

doi:10.1080/00036846.2017.1418082

Cited by 25 publications

(37 citation statements)

References 15 publications

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“…Following the concept of efficient markets, asset prices (equivalent to betting odds) should contain all available information (Fama 1970). Since bookmakers face uncertainty of events and have to adjust to new information (Deutscher, Frick, and Ötting 2018), they keep a risk premium, referred to as margin. Such margins decreased in recent years due to increasing competition between bookmakers (Štrumbelj and Šikonja 2010).…”

Section: (Mis-)pricing Of the Home Advantage By Bookmakersmentioning

confidence: 99%

Bookmakers’ mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break

2021

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The outbreak of COVID-19 in March 2020 led to a shutdown of economic activities in Europe. This included the sports sector since public gatherings were prohibited. The German Bundesliga was among the first sport leagues realizing a restart without spectators. Several recent studies suggest that the home advantage of teams eroded for the remaining matches. Our paper analyses the reaction by bookmakers to the disappearance of such home advantage. We show that bookmakers had problems to adjust the betting odds in accordance with the disappeared home advantage, opening opportunities for profitable betting strategies.

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Section: (Mis-)pricing Of the Home Advantage By Bookmakersmentioning

confidence: 99%

Bookmakers’ mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break

2021

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“…There is some variation across matches in the extent to which scorelines and results are revised, with a standard deviation of 3 forecasts for both. Deutscher et al (2018) have demonstrated that newly promoted teams to a football league can be systematically underestimated on betting markets at the beginning of a season, which suggests that the Superbru game players could be less confident when forecasting matches involving promoted teams. However, we find that the median number of forecast revisions among the 150 game players for matches involving at least one of the three promoted teams, 9, is the same as for matches not involving them, and the mean number of revisions is marginally lower in games involving promoted teams than those not involving them.…”

Section: Forecast Revisions In the Gamementioning

confidence: 99%

Going with your gut: The (In)accuracy of forecast revisions in a football score prediction game

Singleton

Reade

Brown

2020

Journal of Behavioral and Experimental Economics

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This paper studies 150 individuals who each chose to forecast the outcome of 380 fixed events, namely all football matches during the 2017/18 season of the English Premier League. The focus is on whether revisions to these forecasts before the matches began improved the likelihood of predicting correct scorelines and results. Against what theory might expect, we show how these revisions tended towards significantly worse forecasting performance, suggesting that individuals should have stuck with their initial judgements, or their 'gut instincts'. This result is robust to both differences in the average forecasting ability of individuals and the predictability of matches. We find evidence this is because revisions to the forecast number of goals scored in football matches are generally excessive, especially when these forecasts were increased rather than decreased.

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“…The sports economics literature looking at sports betting market efficiency generally finds these markets to be efficient over a long period of time (e.g. Deutscher et al, 2018). This finding results from the fact that the market reflects all available information regarding the event in which the bet is placed.…”

Section: Introductionmentioning

confidence: 99%

“…As a result, a bettor cannot use a strategy to make a profit in the long-term. Over short periods of time, however, there are instances where market inefficiency could occur (Buckle & Huang, 2018; Deutscher et al, 2018). The reason is market makers (i.e.…”

Section: Introductionmentioning

confidence: 99%

“…bookmakers) are still gathering information that is crucial to the outcome of the game. For example, in professional football, Deutscher et al (2018) found that at the start of the season in the German Bundesliga, betting on recently promoted clubs would represent a profitable betting strategy. The rationale they provided for this short-term profit is that bookmakers are not quite sure on the overall ability of the recently promoted clubs and how they will adapt to the new league.…”

Section: Introductionmentioning

confidence: 99%

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How do Bookmakers Interpret Running Performance of Teams in Previous Games? Evidence From the Football Bundesliga

Soebbing

Wicker

Weimar

et al. 2020

Journal of Sports Economics

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This study examines how running performance (intensive runs, total distance covered) of football teams in previous games impacts betting markets as it relates to expected win probability. Theoretically, bookmakers could interpret team’s running performance as effort or fatigue, with sports science studies suggesting that distance covered reflects effort and intensive runs signal fatigue. Using data from the 2011/12-2018/19 seasons of the German Bundesliga, beta regression models reveal that bookmakers interpret team’s running performance in previous games contrary to physiological explanations in sports sciences. Tests of market efficiency incorporating these findings do not find a profitable betting strategy for bettors.

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Betting market inefficiencies are short-lived in German professional football

Cited by 25 publications

References 15 publications

Bookmakers’ mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break

Bookmakers’ mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break

Going with your gut: The (In)accuracy of forecast revisions in a football score prediction game

How do Bookmakers Interpret Running Performance of Teams in Previous Games? Evidence From the Football Bundesliga

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