Suchergebnisse

I use UK betting exchange data on Wimbledon tennis matches to investigate the Grossman and Stiglitz (1980) paradox. Risk‐free arbitrage opportunities arise frequently during matches (as information arrives and asynchronously shifts prices), but seldom arise before matches (when there is little information to move prices). I find that on the few occasions that arbitrage opportunities do arise before matches, they last substantially longer than average. This suggests, in line with the paradox, that traders neglect to acquire information (carry out research or watch markets) if they believe that markets are already efficient. This neglect, in turn, makes markets inefficient.

Contests are ubiquitous in economic, organizational and political settings. Contest designers often use tools to make a contest among asymmetric contestants more even, in order to either elicit higher effort levels, or for ethical reasons. Handicapping – in which stronger participants are a priori weakened – is one successful tool that is widely used in sports, promotional tournaments and procurement auctions. In this study we show theoretically that participants may also increase their destructive effort, and sabotage their rivals' performance, when handicapping is employed. We empirically verify this prediction using data on 19,635 U.K. horse-races in 2011 and 2012. Our results suggest that while a level field may be conducive to heightened positive effort in general, in a setting where both handicapping and sabotage are present it also lays the ground for greater destruction.

Contests are ubiquitous in economic, organizational and political settings. Contest designers often use tools to make a contest among asymmetric contestants more even, in order to either elicit higher effort levels, or for ethical reasons. Handicapping – in which stronger participants are a priori weakened – is one successful tool that is widely used in sports, promotional tournaments and procurement auctions. In this study we show theoretically that participants may also increase their destructive effort, and sabotage their rivals' performance, when handicapping is employed. We empirically verify this prediction using data on 19,635 U.K. horse-races in 2011 and 2012. Our results suggest that while a level field may be conducive to heightened positive effort in general, in a setting where both handicapping and sabotage are present it also lays the ground for greater destruction.

AbstractThis study analyses point forecasts of exact scoreline outcomes for football matches in the English Premier League. These forecasts were made for distinct competitions and originally judged differently. We compare these with implied probability forecasts using bookmaker odds and a crowd of tipsters, as well as point and probability forecasts generated from a statistical model. From evaluating these sources and types of forecast, using various methods, we argue that regression encompassing is the most appropriate way to compare point and probability forecasts, and find that both these types of forecasts for football match scorelines generally add information to one another.