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Information Efficiency in Betting Markets: A Survey

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  • Vaughan Williams, Leighton

Abstract

The concept of information efficiency is central to many studies of financial markets, and these studies have been well surveyed to date. A betting market is an example of a simple financial market, but one which offers researchers the added advantage that it is characterized by a well-defined termination point at which each asset (or bet) possesses a definite value. In consequence, it is much more convenient to use this particular context to formulate tests of information efficiency, and from these tests to draw useful conclusions. This paper surveys the rapidly growing literature which has to date addressed this issue of information efficiency in betting markets. Copyright 1999 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

Suggested Citation

  • Vaughan Williams, Leighton, 1999. "Information Efficiency in Betting Markets: A Survey," Bulletin of Economic Research, Wiley Blackwell, vol. 51(1), pages 1-30, January.
    • Handle: RePEc:bla:buecrs:v:51:y:1999:i:1:p:1-30
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    References listed on IDEAS

    as
    1. Ruth N. Bolton & Randall G. Chapman, 2008. "Searching For Positive Returns At The Track: A Multinomial Logit Model For Handicapping Horse Races," World Scientific Book Chapters, in: Donald B Hausch & Victor SY Lo & William T Ziemba (ed.), Efficiency Of Racetrack Betting Markets, chapter 17, pages 151-171, World Scientific Publishing Co. Pte. Ltd..
    2. Asch, Peter & Quandt, Richard E., 1988. "Betting bias in 'exotic' bets," Economics Letters, Elsevier, vol. 28(3), pages 215-219.
    3. repec:bla:econom:v:43:y:1976:i:17:p:139-50 is not listed on IDEAS
    4. De Bondt, Werner F M & Thaler, Richard, 1985. "Does the Stock Market Overreact?," Journal of Finance, American Finance Association, vol. 40(3), pages 793-805, July.
    5. Ali, Mukhtar M, 1979. "Some Evidence of the Efficiency of a Speculative Market," Econometrica, Econometric Society, vol. 47(2), pages 387-392, March.
    6. Ron Bird & Michael Mccrae, 2008. "Tests Of The Efficiency Of Racetrack Betting Using Bookmaker Odds," World Scientific Book Chapters, in: Donald B Hausch & Victor SY Lo & William T Ziemba (ed.), Efficiency Of Racetrack Betting Markets, chapter 59, pages 593-603, World Scientific Publishing Co. Pte. Ltd..
    7. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    8. Clotfelter, Charles T & Cook, Philip J, 1991. "Lotteries in the Real World," Journal of Risk and Uncertainty, Springer, vol. 4(3), pages 227-232, July.
    9. Bird, Ron & McCrae, Michael & Beggs, John J, 1987. "Are Gamblers Really Risk Takers?," Australian Economic Papers, Wiley Blackwell, vol. 26(49), pages 237-253, December.
    10. repec:bla:econom:v:52:y:1985:i:27:p:295-304 is not listed on IDEAS
    11. Chan, K C, 1986. "Can Tax-Loss Selling Explain the January Seasonal in Stock Returns?," Journal of Finance, American Finance Association, vol. 41(5), pages 1115-1128, December.
    12. Asch, P. & Quandt, R.E., 1988. "Betting Bias In Exotic Bets," Papers 90, Princeton, Department of Economics - Financial Research Center.
    13. R. Bird & M. McCrae, 2008. "The Efficiency Of Racetrack Betting Markets: Australian Evidence," World Scientific Book Chapters, in: Donald B Hausch & Victor SY Lo & William T Ziemba (ed.), Efficiency Of Racetrack Betting Markets, chapter 57, pages 575-582, World Scientific Publishing Co. Pte. Ltd..
    14. Busche, Kelly & Hall, Christopher D, 1988. "An Exception to the Risk Preference Anomaly," The Journal of Business, University of Chicago Press, vol. 61(3), pages 337-346, July.
    15. Fama, Eugene F, 1991. "Efficient Capital Markets: II," Journal of Finance, American Finance Association, vol. 46(5), pages 1575-1617, December.
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