2021/07/15 by Marius Ötting, Ötting, Marius, Rouven Michels +5
Economics, Econometrics and Finance · Psychology · #FOS: Physical sciences #Financial Markets and Investment Strategies #Gambling Behavior and Treatments #Physics and Society (physics.soc-ph) #Sports Analytics and Performance
paper · pdf · doi:10.48550/arxiv.2108.00821
openalex publication_date 2021/07/15 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
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 might overreact to recent news, confirming cognitive biases known from psychology and behavioural economics.