Author: Otting, Marius; Michels, Rouven; Langrock, Roland; Deutscher, Christian
Title: The reaction to news in live betting Cord-id: oy7e2rh2 Document date: 2021_7_15
ID: oy7e2rh2
Snippet: Sports betting markets have grown very rapidly recently, with the total European gambling market worth 98.6 billion euro in 2019. Considering a high-resolution (1 Hz) data set provided by a large European bookmaker, we investigate the effect of news on the dynamics of live betting. In particular, we consider stakes placed in a live betting market during football matches. Accounting for the general market activity level within a state-space modelling framework, we focus on the market's response t
Document: Sports betting markets have grown very rapidly recently, with the total European gambling market worth 98.6 billion euro in 2019. Considering a high-resolution (1 Hz) data set provided by a large European bookmaker, we investigate the effect of news on the dynamics of live betting. In particular, we consider stakes placed in a live betting market during football matches. Accounting for the general market activity level within a state-space modelling framework, we focus on the market's response to events such as goals (i.e. major news), but also to the general situation within a match such as the uncertainty about the outcome. Our results indicate that markets tend to overreact to recent news, confirming cognitive biases known from psychology and behavioural economics.
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