Work detail

Fair Bets in Sports Betting

Author: Mgr. Jiří Jansa
Year: 2012 - winter
Leaders: Mgr. Barbara Pertold-Gebicka M.A., Ph.D.
Work type: Economic Theory
Language: English
Pages: 104
Awards and prizes:
Abstract: Market efciency and existence of profitable strategy are the most frequent
analysis in the research concerning betting on sport events. This thesis covers
both these topics on the dataset (20 betting ofices) of Czech ice-hockey league
from 2004 to 2010. The theoretical part presents development of models of
individual decision-making under risk and uncertainty, models of equilibrium
on the betting market and several de nitions of market eficiency (Fama and
Sauer as authors of these concepts) on these markets. The statistical part is
testing di erence in margins of betting companies for 3 possible outcomes of
game, convergence in quoted odds across betting ofices, arbitrage opportunity
and correspondence of quoted odds to the real probabilities (linear and nonlinear).
Simple model of perfect market might be by all these tests rejected,
since there is no constant return from betting on all outcomes, betting oces
di er in margins, quoted odds do not correspond to the real probabilities and
arbitrage opportunity is not disappearing. Second empirical part is devoted to
the search for profitable strategy. Using 14 explanatory variables and various
statistical methods (linear probability model, logit model, multinomial logit
model), author is trying to beat bias in odds and long-term profitable betting
strategy. Returns from strategies are usually positive, but for the second
part of dataset are getting smaller. Still, hypothesis of efcient betting market
might be rejected by this methodology as well. During the thesis, author
suggests several improvements in analysis and potential properties of general
model for this market.
Downloadable: Diploma Thesis of Jansa




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