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Supernudge: A transparent pricing proposal for sports betting

Author

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  • Evan Calford

Abstract

This paper documents a policy proposal that improves consumer welfare in the sports betting industry by changing the framing of betting odds. On the demand side the proposal increases price salience, particularly for multibets, and acts as a classic behavioral nudge. On the supply side, the same change in framing increases the dimension of the pricing vector and, therefore, introduces a new dimension of price competition. In particular, the policy change introduces price competition into the market for multibets, reduces the current extraordinarily high profit margin on multibets, reduces non-price competition, and decreases demand for advertising from sports betting firms.

Suggested Citation

  • Evan Calford, 2024. "Supernudge: A transparent pricing proposal for sports betting," ANU Working Papers in Economics and Econometrics 2024-700, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2024-700
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    File URL: https://cbe.anu.edu.au/researchpapers/econ/wp700.pdf
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    More about this item

    Keywords

    Sports betting; transparent pricing; nudges; market structure;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z28 - Other Special Topics - - Sports Economics - - - Policy

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