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Suspense and Surprise: The Role of Bookmakers’ Spreads

Author

Listed:
  • Isabel Abinzano
  • Harold Bonilla
  • Luis Muga

Abstract

Uncertainty in a competition's final result can affect the event's demand via suspense and surprise. Based on a sample of more than 50,000 professional tennis matches, this paper shows how information from bookmaker prices, implied probabilities, and price spreads contain relevant information that explains the uncertainty in the final results of the matches. There is a negative relation between the implied probability for the favorite and the different measures of match result uncertainty proposed and a positive relationship between the spread and these measures when the bookmaker sets prices based on information. This second relation disappears when the bookmaker sets prices based on betting volumes. The results have potential implications both for organizers in scheduling matches with higher levels of uncertainty and for punters in setting strategies that predict the exact result of a match.

Suggested Citation

  • Isabel Abinzano & Harold Bonilla & Luis Muga, 2025. "Suspense and Surprise: The Role of Bookmakers’ Spreads," Journal of Sports Economics, , vol. 26(3), pages 240-267, April.
    • Handle: RePEc:sae:jospec:v:26:y:2025:i:3:p:240-267
    DOI: 10.1177/15270025241289406
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    More about this item

    Keywords

    uncertainty; bookmakers’ spread; tennis; match results;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Z2 - Other Special Topics - - Sports Economics

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