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Testing Market Efficiency in a Fixed Odds Betting Market

Author

Listed:
  • Jakobsson, Robin

    (Department of Business, Economics, Statistics and Informatics)

  • Karlsson, Niklas

    (Department of Business, Economics, Statistics and Informatics)

Abstract

This paper tests the hypothesis of market efficiency for the fixed odds betting market of Swedish trotting head-to-head matches. The hypothesis is carried out by a Wald test within a logistic regression model. Data support rejection of semi-strong efficiency at the 5 percent level of significance, while the weak form efficiency cannot be rejected. Moreover, evaluation of the simple strategy to bet on those horses where, conditional on the estimated model, the expected profit is positive results in a profit of 7.8 percent per bet.

Suggested Citation

  • Jakobsson, Robin & Karlsson, Niklas, 2007. "Testing Market Efficiency in a Fixed Odds Betting Market," Working Papers 2007:12, Örebro University, School of Business.
    • Handle: RePEc:hhs:oruesi:2007_012
    as

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    File URL: https://www.oru.se/globalassets/oru-sv/institutioner/hh/workingpapers/workingpapers2007/wp-12-2007.pdf
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    References listed on IDEAS

    as
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    Cited by:

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    More about this item

    Keywords

    EMH; betting; trotting; market; efficiency; logit; Wald;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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