Efficiency in gambling markets involving spread: A corrected and simplified test

Authors

Bill M. Woodland, Eastern Michigan UniversityFollow
Linda M. Woodland, Eastern Michigan UniversityFollow

Document Type

Article

Publication Date

1997

Department

Accounting and Finance

Abstract

This paper examines the efficiency of the legal gambling market for major league baseball. Weak-form tests of market efficiency within and across odds lines are performed. Surprisingly, the consistently observed favorite-longshot bias in racetrack betting is shown to exist in reverse for baseball bettors. However, these and other deviations from efficiency are shown to be insufficient to allow for profitable betting strategies when commissions are considered.

DOI

10.1080/758526702

Citation

Woodland, B. M., & Woodland, L. M. (1997). Efficiency in gambling markets involving spread: A corrected and simplified test. Applied Economics Letters, 4(2), 93–95.