IDEAS home Printed from https://ideas.repec.org/p/biu/wpaper/2011-13.html
   My bibliography  Save this paper

Testing for Home Team and Favorite Biases in the Australian Rules Football Fixed Odds and Point Spread Betting Markets

Author

Listed:
  • Adi Schnytzer

    (Bar-Ilan University)

  • Guy Weinberg

    (Bar-Ilan University)

Abstract

In this paper, we test two different kinds of bias; the favorite-longshot/favorite-underdog and the home team bias, and distinguish between the two, using a distinctive feature of the Australian Football League (AFL), that many games are played on neutral grounds. This is the first empirical study, to the best of our knowledge, to make a clear distinction between the two types of bias. We conduct our tests by subjecting 2001-2004 data for the AFL to detailed scrutiny, using standard econometric weak-form efficiency models of point spread and fixed odds betting markets. Where the results suggest the presence of a bias, we test potential profitability via betting simulation. We are able to reject the existence of any significant pure favorite-longshot/favorite-underdog bias in either market, and to demonstrate the existence of a significant bias in favor of teams with an apparent home ground advantage in games played outside Victoria in the point spread market and in the fixed odds market during 2002, 2004 and the period as a whole. Games in Melbourne and in Geelong are free of such a bias (except for 2003 in the point spread market in Geelong). Betting simulations which attempt to exploit these inefficiencies yield modest profits.

Suggested Citation

  • Adi Schnytzer & Guy Weinberg, 2011. "Testing for Home Team and Favorite Biases in the Australian Rules Football Fixed Odds and Point Spread Betting Markets," Working Papers 2011-13, Bar-Ilan University, Department of Economics.
  • Handle: RePEc:biu:wpaper:2011-13
    as

    Download full text from publisher

    File URL: https://www2.biu.ac.il/soc/ec/wp/2011-13.pdf
    File Function: Working paper
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Young, Andrew T. & Higgins, Matthew J. & Levy, Daniel, 2008. "Sigma Convergence versus Beta Convergence: Evidence from U.S. County-Level Data," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 40(5), pages 1083-1093.
    2. Ravi Kanbur & Hillel Rapoport, 2005. "Migration selectivity and the evolution of spatial inequality," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 43-57, January.
    3. Levy, Daniel & Lee, Dongwon & Chen, Haipeng (Allan) & Kauffman, Robert J. & Bergen, Mark, 2011. "Price Points and Price Rigidity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 93(4), pages 1417-1431.
    4. James D. Dana & Michael M. Knetter, 1994. "Learning and Efficiency in a Gambling Market," Management Science, INFORMS, vol. 40(10), pages 1317-1328, October.
    5. Levy, Daniel & Müller, Georg & Chen, Haipeng (Allan) & Bergen, Mark & Dutta, Shantanu, 2010. "Holiday Price Rigidity and Cost of Price Adjustment," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 77(305), pages 172-198.
    6. Chen, Haipeng (Allan) & Levy, Daniel & Ray, Sourav & Bergen, Mark, 2008. "Asymmetric Price Adjustment in the Small," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(4), pages 728-737.
    7. Ray, Sourav & Chen, Haipeng (Allan) & Bergen, Mark & Levy, Daniel, 2006. "Asymmetric Wholesale Pricing: Theory and Evidence," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 25(2), pages 109-201.
    8. Ronen Bar-El & Teresa García-Muñoz & Shoshana Neuman & Yossef Tobol, 2013. "The evolution of secularization: cultural transmission, religion and fertility—theory, simulations and evidence," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1129-1174, July.
    9. Matthew Higgins & Daniel Levy & Andrew T. Young, 2003. "Growth and Convergence across the US: Evidence from County-Level Data," Working Papers 2003-03, Bar-Ilan University, Department of Economics.
    10. Avichai Snir & Daniel Levy, 2011. "Shrinking Goods and Sticky Prices: Theory and Evidence," Working Papers 2011-03, Bar-Ilan University, Department of Economics.
    11. Leonid V. Azarnert, 2008. "Involuntary Integration in Public Education, Fertility and Human Capital," Working Papers 2008-07, Bar-Ilan University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adi Schnytzer & Janez Sustersic, 2011. "The Regression Tournament: A Novel Approach To Prediction Model Assessment," Journal of Prediction Markets, University of Buckingham Press, vol. 5(2), pages 32-43.
    2. Adi Schnytzer & Sara Westreich, 2011. "Information and Attitudes to Risk at the Track," Working Papers 2011-16, Bar-Ilan University, Department of Economics.
    3. Gil Epstein & Alessandra Venturini, 2011. "The Impact of Worker Effort on Public Sentiment Towards Temporary Migrants," RF Berlin - CReAM Discussion Paper Series 1109, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    4. Stephen E. Spear & Warren Young, 2011. "MD Dialog on: Optimum Savings and Optimal Growth: the Cass-Malinvaud-Koopmans Nexus," Working Papers 2011-22, Bar-Ilan University, Department of Economics.
    5. Adi Schnytzer & Yisrael Schnytzer, 2011. "Animal Modeling of Earthquakes and Prediction Market," Working Papers 2011-20, Bar-Ilan University, Department of Economics.
    6. Young, Andrew T. & Levy, Daniel, 2014. "Explicit Evidence of an Implicit Contract," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 30(4), pages 804-832.
    7. Arthur Fishman & Nadav Levy, 2011. "Search Costs and Risky Investment in Quality," Working Papers 2011-04, Bar-Ilan University, Department of Economics.
    8. Adi Schnytzer & Barbara Luppi, 2008. "Painful Regret and Elation at the Track," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 2(3), pages 85-99, December.
    9. Levy, Daniel & Snir, Avichai & Gotler, Alex & Chen, Haipeng (Allan), 2020. "Not all price endings are created equal: Price points and asymmetric price rigidity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue forthcomi.
    10. Eyal Baharad & Jacob Goldberger & Moshe Koppel & Shmuel Nitzan, 2012. "Beyond Condorcet: optimal aggregation rules using voting records," Theory and Decision, Springer, vol. 72(1), pages 113-130, January.
    11. Igal Milchtaich, 2010. "Network Topology and Equilibrium Existence in Weighted Network Congestion Games," Working Papers 2010-09, Bar-Ilan University, Department of Economics.
    12. Ray, Sourav & Snir, Avichai & Levy, Daniel, 2023. "Retail Pricing Format and Rigidity of Regular Prices," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-1.
    13. Snir, Avichai & (Allan) Chen, Haipeng & Levy, Daniel, 2022. "Zero-ending prices, cognitive convenience, and price rigidity," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 519-542.
    14. Snir, Avichai & Levy, Daniel, 2021. "If You Think 9-Ending Prices Are Low, Think Again," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(1 (Forthc).
    15. Mark Bergen & Daniel Levy & Sourav Ray & Paul H. Rubin & Benjamin Zeliger, 2008. "When Little Things Mean a Lot: On the Inefficiency of Item-Pricing Laws," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 209-250, May.
    16. Daniel Levy, 2007. "Price rigidity and flexibility: new empirical evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 639-647.
    17. Avichai Snir & Daniel Levy, 2011. "Shrinking Goods and Sticky Prices: Theory and Evidence," Working Paper series 17_11, Rimini Centre for Economic Analysis.
    18. Bittmann, Thomas & Loy, Jens-Peter & Anders, Sven, 2017. "Cost Pass-Through And Product Differentiation," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261145, European Association of Agricultural Economists.
    19. Diego Aparicio & Duncan Simester, 2022. "Price Frictions and the Success of New Products," Marketing Science, INFORMS, vol. 41(6), pages 1057-1073, November.
    20. Snir, Avichai & Levy, Daniel & Chen, Haipeng (Allan), 2017. "End of 9-endings, price recall, and price perceptions," Economics Letters, Elsevier, vol. 155(C), pages 157-163.

    More about this item

    Keywords

    market efficiency; betting markets; sports economics; Australian Rules football;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:biu:wpaper:2011-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Department of Economics (email available below). General contact details of provider: https://edirc.repec.org/data/debaril.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.