Are Sports Bettors Biased toward Longshots, Favorites, or Both? A Literature Review
Abstract
:1. Introduction
2. Sports Betting Markets: Setting Odds and Preferences
3. Sports Betting Decision Making
4. Horse Racing
5. Soccer
6. Other Sports
7. Conclusions and Discussion: Explaining These Biases
Author Contributions
Funding
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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1 | The term “favorite-longshot bias” was originally used to describe what is termed “longshot bias” here: longshot bets with large potential wins but a low probability of winning tended to have above-average expected losses. The opposite bias, where favorite teams have above-average expected losses, was originally termed “reverse favorite-longshot bias.” The simpler terms “longshot bias” and “favorite bias” are used here to describe the individual biases, while “favorite-longshot bias” will be used in reference to either bias. |
2 | |
3 | Given that the initial empirical papers tended to support longshot bias, some theoretical accounts explore causes of only the longshot bias, e.g., (Snowberg and Wolfers 2010). |
4 | For example, considers outcomes with probabilities of 90% and 0.3%, respectively. With no profit margins, the odds should be 1.1111 and 333.33. Typically, a betting company may have possible odds grids such that odds are offered at rounded figures. In this case, the odds offered could be at 1.1 and 300. The discrepancy in the likely outcome is 1% while it is 10% for the unlikely outcome. Here, it is less than 1%. Since grid levels are wider for unlikely outcomes, there is a wider discrepancy between subjective and objective probabilities for these cases. |
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Newall, P.W.S.; Cortis, D. Are Sports Bettors Biased toward Longshots, Favorites, or Both? A Literature Review. Risks 2021, 9, 22. https://doi.org/10.3390/risks9010022
Newall PWS, Cortis D. Are Sports Bettors Biased toward Longshots, Favorites, or Both? A Literature Review. Risks. 2021; 9(1):22. https://doi.org/10.3390/risks9010022
Chicago/Turabian StyleNewall, Philip W. S., and Dominic Cortis. 2021. "Are Sports Bettors Biased toward Longshots, Favorites, or Both? A Literature Review" Risks 9, no. 1: 22. https://doi.org/10.3390/risks9010022