An Empirical Examination of the Parimutuel Sports Lottery Market versus the Bookmaker Market
- Authors
- Chung, Jaiho; Hwang, Joon Ho
- Issue Date
- 4월-2010
- Publisher
- WILEY
- Citation
- SOUTHERN ECONOMIC JOURNAL, v.76, no.4, pp.884 - 905
- Indexed
- SSCI
AHCI
SCOPUS
- Journal Title
- SOUTHERN ECONOMIC JOURNAL
- Volume
- 76
- Number
- 4
- Start Page
- 884
- End Page
- 905
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/116764
- DOI
- 10.4284/sej.2010.76.4.884
- ISSN
- 0038-4038
- Abstract
- A sports lottery in Korea presents a unique opportunity for comparing a parimutuel-type sports lottery market against a bookmaker market outside the realm of horse racing. Using two- and three-game soccer final-score betting in the sports lottery market in Korea, which features matches in the English Premier League, we compare winning payoffs in this parimutuel-type sports lottery against corresponding payoffs from an established bookmaker market in the United Kingdom. We find that for outcomes with relatively high payouts (that is, lower-probability events), winning bets placed in the sports lottery market have greater payoffs than corresponding bets placed in the bookmaker-based market. However, the opposite is true for outcomes with relatively low payouts (that is, higher-probability events). Results suggest that participants in the sports lottery market tend to bet more toward high-probability events than the amount implied by the bookmaker's odds. Results also suggest that the favorite-longshot bias is still present in the bookmaker market, even when there is less threat of privately informed bettors than in horse racing.
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Collections - Korea University Business School > Department of Business Administration > 1. Journal Articles
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