Journal of Economics and Finance

, Volume 31, Issue 1, pp 49–58 | Cite as

Empirical evidence of error in pricing of favorites and longshots in greyhound racing

Article

Abstract

Sports bettors' success depends on the ability to accurately assess the true probability of outcomes. Successful racetrack bettors can realize returns better than the track take out. Historical empirical evidence shows the presence of favorite-longshot bias (FLB) in horse racing where bettors underbet favorites. Conversely, bettors overbet longshots. We tested for FLB bias in racing data from three greyhound racetracks. Our results show opposite behavior. We show bettors apparently underestimated for longshots, and overestimated for favorites, the true probability of winning. In 10 out of 14 grades bettors significantly overbet favorites, and underbet longshots in 8 out of 14.

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Copyright information

© Springer 2007

Authors and Affiliations

  1. 1.Western New England CollegeSpringfield
  2. 2.Salisbury UniversitySalisbury

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