Expert Analysis and Insider Information in Horse Race Betting: Regulating Informed Market Behavior

We present a new model analyzing the effect of uncertainty faced by bookmakers. It is shown that bettors with inside information or expert analysis decrease the odds set by profit‐maximizing bookmakers. Data on previously unraced 2‐year‐old horses and those that have raced previously are used to examine the impact of the greater possibility of insider information on odds bias in relation to unraced horses. The probability of an unraced 2‐year‐old winning is found to be on average 16% higher than that of a raced 2‐year‐old horse with the same odds. This effect decreases as the probability of winning increases. The latter effect indicates a possible contribution to the favorite‐longshot bias, and the former shows the importance of insider information in the setting of market odds. The regulation of the use of insider information is discussed in light of the similar impact of insider information and expert analysis on bookmaker odds.     

Sentimental Preferences and the Organizational Regime of Betting Markets

We analyze the price impact of sentimental bettor preferences within a bookmaker betting market. A theoretical model demonstrates that, under reasonable assumptions about the nature of demand in a market with strong competition, the bookmaker will offer lower prices for bets with comparatively stronger demand. Using a sample of more than 16,000 English soccer matches we find evidence that more favorable odds are extended to bets on more popular clubs and that this effect is amplified on weekends when sentimental bettors face lower opportunity costs to wager. Our findings help to explain why the market for sports gambling operates as a hybrid structure with bookmakers able to attract a considerable share of the betting volume, although identical contracts are traded on exchange markets at lower costs: the organizational design of a quote‐driven market enables the dealer to take advantage of sentimental bettor preferences.     

不确定情境下的决策行为分析:一个文献综述

文章针对不确定情境下决策行为经济学与行为经济学研究文献进行全面地回顾与梳理。在一般风险情境下,决策者能给出事件状态唯一的概率分布;但面对不确定情境时,由于信息不充分导致其不能给出事件状态唯一的概率分布。在生活中仅有小部分事件状态的发生概率事先已知：如彩票的中奖概率、掷骰子游戏（小世界原理）等,大部分事件状态的发生概率事先是未知的：如赛马中奖概率、确诊为某类疾病的概率、疾病被治愈的概率、股票指数上涨或下跌的概率、保险事件中意外事件的发生概率、气候指数的变化概率、消费者购买到劣质商品的概率等。基于此,我们进行了行为经济学意义上的理论分类和逻辑归纳,以便我们更好地理解人类行为与决策的复杂属性。     

The lottery as an alternative source of state revenue

Conclusion In this paper the authors have developed an economic model of state lotteries that determines the probability of whether a given state will adopt a lottery or not, determines the probability of whether a given state is likely to adopt a lottery sooner rather than later, and determines the state's expected net spendable revenues generated by adopting and operating a lottery. The authors found that a given state will tend to adopt a lottery and will tend to adopt the lottery sooner, the higher the relative tax effort of the state, the higher the mean personal income of the state's residents (or the lower the fraction of the state's residents that are in poverty), the greater the restrictions on raising other taxes in the state, the greater the state's spendable revenue generated from parimutuel betting in the state, the larger the fraction of the state's border that is contiguous with other states with lotteries, and since 1980, the greater the annual number of tourists or visitors in the state.A state's expected net spendable revenue from adopting and operating a lottery is greater the higher the mean personal income of residents in the state, the greater the annual number of tourists or visitors in the state, the smaller the fraction of the state's border that is contiguous with other states with lotteries, and the smaller the parimutuel industry in the state. The ability of a given state's residents to cross the border to purchase lottery tickets in contiguous states, and the ability to engage in parimutuel betting in a state are substitutes for the purchase of lottery tickets in the given state and significantly reduce the expected net spendable revenue from adopting and operating a lottery in that state.From a policy making standpoint, legislators often appear to support the adoption of a lottery for their state without fully considering a realistic expected level of net spendable revenue that the proposed lottery is likely to generate for that particular state.⁸ Often these legislators apparently do not consider important determinants of expected lottery profits such as the level of personal income of state residents, the annual number of tourists in the state, and the presence or absence of adjacent states with lotteries. Also, legislators do not consider fully the impact that adopting a lottery will have on existing parimutuel betting industries in the state. Likewise, legislators apparently do not consider the negative impact of parimutuel betting on the expected net spendable revenue generated by the proposed lottery. Legislative decisions made in the absence of full information often tend to be inefficient decisions. The present study may encourage policy makers to become better informed on the issue of lottery adoption for their state.     

Efficiency in Pari-Mutuel Betting Markets across Wagering Pools in the Simulcast Era

Simulcast wagering, where bets from across the country are taken at tracks, off-track betting facilities, casinos, by phone or online and incorporated into the same mutuel pool, has contributed to a large increase in betting volume on American horse races since the mid-1990s. This article investigates betting-market efficiency in the simulcast era focusing on whether the interrelated betting markets comprised of win, place (finishing in the top two), and show (finishing in the top three) wagering are efficiently priced. We find that the increased accessibility and betting volume associated with simulcasting has reduced, but not eliminated, the inefficiencies seen in prior studies. Despite the inefficiencies in these markets, arbitrage is not profitable because market closing prices are unknown when bets are placed.     

Freedom of Entry,Market Size,and Competitive Outcome: Evidence from English Soccer

A primary prediction of the theory of sports leagues is that teams with higher revenues will have higher league positions or winning percentages than teams with smaller revenues. Behind this prediction lies the key influence of market size, yet this has been underexplored in the empirical literature on sports leagues. This paper combines detailed census of population data with panel data on team performance for an open sports league, the English Football League, to test the hypothesis that market size matters for team performance. We find a particularly important role for population close to the team's location. The impact of local population is reduced but not eliminated when allowance is made for entry in the form of competition from neighboring clubs. We assess implications of these findings for both European and North American sports league structures.     

Increasing Diversity in Telecommunications Ownership and Increasing Efficiency in Spectrum Auctions by Breaking the Link Between Capital Market Discrimination and FCC Spectrum Auction Outcomes

In Section 309(j)4(D) of the Communications Act, the Federal Communications Commission (“FCC”) is required to increase opportunities for minority groups to participate in the provision of spectrum based services. In Adarand Construction, Inc. v. Pena, the Supreme Court held that race-based government programs were subject to strict scrutiny. That is race-based programs must serve a compelling governmental interest such as remedying past discrimination, and must be narrowly tailored to serve that interest. Against this backdrop, a simple theoretical model is developed that explains the relationship between capital market discrimination and outcomes in FCC spectrum auctions. Given capital market discrimination and all other factors being equal, it is shown that a minority firm has zero probability of winning in an auction for spectrum. In addition, it is proven that, if equal bidding credits are given to all firms, if there is capital market discrimination, and if all other things are equal, the minority firm has a zero probability of winning in a spectrum auction. It is shown that a policy of auctioning spectrum, when there is capital market discrimination, is an inferior policy among policies that can be used to allocate spectrum. Finally, a policy of auctioning spectrum, when there is capital market discrimination, results in an inefficient auction. These theoretical results and the empirical literature on capital market discrimination suggest that the FCC is implicitly discriminating against minorities through its auctioning of spectrum under conditions of discrimination in capital markets. The results imply that race-based programs are necessary/justified in order to increase diversity in telecommunications ownership and increase the efficiency of FCC Spectrum Auctions. Given possible legal remedies, the paper contains a critical “audit”/analysis of the FCC’s lending practices under the FCC’s installment payments. Legislative proposals for creating some new form of credit/installment payment in conjunction with some experienced financial institution(s) are summarized and reviewed.     

Market In efficiency in Person‐to‐Person Betting: Examining ‘Known Loser’ Insider Trading on the Exchanges

Applying the Shin z measure of market efficiency to the relatively new person‐to‐person internet betting exchanges, Smith, Paton, and Vaughan Williams found “significantly lower market biases” compared to bookmaker‐dominated markets. A reduced favorite‐longshot bias is interpreted as evidence that insider trading on the exchanges “is not widespread” and “not as commonplace … as is sometimes portrayed in the media.” Given that the Shin measure assumes “betting with bookies,” whereas the exchanges represent “betting without bookies,” the present study employs the notion of ‘significant mover’ to empirically test for the presence of ‘known loser’ insider trading on the exchanges where traditional notions of bookmaking do not apply. Findings indicate that, far from being less problematized by insider trading compared to racetrack betting, activity aimed at profiting from “known losers” may be potentially commonplace on the exchanges. This includes profiting from horses that are unplaced. This study offers new insight into the efficiency of betting markets.     

Examining Agency Conflict in Horse Racing

We study UK horse racing for signs of conflict between horse owners (principals) and trainers (agents). Trainers often prepare their own horses for races in addition to having outsiders' horses in their care. Utilizing betting market data to infer the expected performance of a horse, we find that owner–trainer horses outperform outsider–trainer horses, indicating that this principal–agent relationship is characterized by agent shirking. If the owner holds a large proportion of the horses in the trainer's stable, the shirking effect may be mitigated but not eradicated. In a separate result, we find that outsider–trainer horses are more inconsistent than their owner–trainer peers. As inconsistency is a sign of betting market manipulation, this suggests that the agent in this setting extracts a second, informational rent from the principal.     

Long-Term Effects of Labour Market Entry Conditions: The Case of Korea

This study investigates the effects of labour market conditions at the time of graduation, proxied by the local unemployment rate, on long-term family and labour market outcomes in Korea. The examination yields four main findings. Labour market entry conditions have strong and persistent effects among high school graduates. Male college graduates have a persistently lower probability of working at large firms if the demand for local labour shrinks at the time of graduation. Self-employment can be persistently hampered by adverse economic conditions at graduation. Family formation and childbearing are temporarily affected by labour market entry conditions, especially for less educated women. The first three findings highlight the notable segmentation of the Korean labour market into protected jobs in large firms – mostly part of business groups (chaebols) – and unprotected jobs.     

Sport and Gambling

We review the relationships between gambling and sport. Britishsports and sports infrastructure have benefited considerablyfrom funding through the National Lottery. We argue that thereis an implicit sports tax on lottery products and that thispolicy may be neither efficient nor equitable. We suggest thatfurther research, employing contingent valuation methodology,would be required before any firm conclusion could be made overwhether the spending facilitated by the tax represents an efficientallocation of resources. Betting on events and outcomes in sport,especially team sports, has become a high-growth sector; weexplore the potential for sports to capture some of this bettorspending and discuss associated public-policy issues. Whilesport may extract revenue from betting, there are also costs.We focus especially on betting corruption in sports, developingan expected utility framework to show where the risk of corruptionis most likely to arise and what regulatory options are opento sports governing bodies and government.     

Turning Points in the Chinese Civil War: A Financial Market Perspective

This paper provides a quantitative assessment of contemporary beliefs about ‘turning points’ that shaped the outcome of the Chinese Civil War (1946–49). We employ an endogenous structural break method relying on a novel data set to exploit breakpoints in the daily price quotes of Chinese sovereign bonds traded on the London market. As late as spring 1947, the London market evidently believed there was a reasonable chance of either the Kuomintang Party winning the war or alternatively achieving a peace agreement. The timing of our major breakpoints generally correspond with the dates of well-known events deemed as important turning points. Caveats exist, however. In particular, some events – for example the Liu-Deng expedition – stand out where we observe stark contrasts between the perceptions held by contemporaries and historians.     

Salience and the Disposition Effect: Evidence from the Introduction of “Cash‐Outs” in Betting Markets

The disposition effect describes the tendency of investors to sell assets that have increased in value since purchase, and hold those that have not. We analyze the introduction of betting market “Cash‐Outs,” which provide a continual update—and therefore increase the salience—of bettors' paper profits/losses on each bet. We find that the introduction of Cash‐Out increased the disposition effect in this market, as punters sold their profitable bets with greater frequency than before. We do not, however, find that the disposition effect has any impact on asset prices, either before or after this intervention.     

Market Power of Domestic Marketers and its Influence on the Consequences of the Korea–US and Korea–Australia FTAs on the Beef Market

Domestic, US and Australian beef, which are differentiated by country of origin, are sold in Korea. In this differentiated product market, tariff reductions through Free Trade Agreements (FTAs) are expected to strengthen the competitiveness of imported beef and, therefore, to mitigate the effects arising from the market power of domestic marketers. The present study develops a simulation model that evaluates this mitigating effect by explicitly reflecting the market structure that domestic beef marketers constitute. The simulation results indicate that the farm-retail marketing margin would decrease by 10.59% or 6.79% due to the Korea–US and Korea–Australia FTAs, respectively, if domestic beef marketers formed a cartel or an oligopoly market (i.e. the degree of market power is 0.5), while the marketing margin under a competitive market scenario is simulated to have no change. The value of beef production would decrease by 1009 million dollars if the marketers form a cartel and hence exercise monopoly power. The FTAs are simulated to reduce the value of beef production by 564 million dollars under the competitive market scenario.     

When Are Audit Firms Sued for Financial Reporting Failures and What Are the Lawsuit Outcomes?

We examine how often audit firms are sued in a large sample of accounting lawsuits that allege financial reporting failures. We find an insignificant relation between the likelihood of auditor litigation and restatements, but the likelihood of auditor litigation is strongly related to the types of alleged accounting deficiencies. We also find that the auditor's type influences the probability of the auditor being sued and the size of the payouts from auditor and nonauditor defendants. In particular, the Big N firms are approximately 7 percent less likely than non–Big N firms to be named as co-defendants, and the auditor's contribution to the plaintiff's payout is significantly larger when a Big N firm is sued. Overall, our findings suggest that auditors are rarely blamed when there are allegations of financial reporting failures, but the types of accounting deficiencies and the auditor's type significantly influence the probability of the audit firm being sued and the outcomes of the lawsuits.     

Growth Enterprise Board Initial Public Offerings： Characteristics,Volatility and the Initial-day Performance

We use the Chinese initial public offering data from October 2009 to August 2010 to examine the newly‐established growth enterprise board (GEB). The results indicate that the GEB has been successful and is providing a viable channel for new small and medium‐sized firms to raise external capital. Four variables, the volatility variable, the turnover ratio, the winning lottery ratio and the price–earnings ratio, are important factors driving the initial‐day returns in the regression analysis. The implementation of the new trading‐halts policy on the GEB is found to be effective in mitigating excessive speculation. Our analysis results could be used by policy‐makers to gauge the effects of policy changes on the underpricing of the initial public offerings of the GEB.     

Fertility Effects of Labor Market Conditions at Graduation

This study examines how individuals' fertility outcomes were affected by the labor market conditions they experienced at graduation. Using data from the Chinese General Social Survey, it finds that poor labor market conditions at graduation delayed individuals' entry into parenthood. Higher unemployment rates at graduation reduced the probability of having at least one child in the survey year for both men and women. The negative fertility effects generally followed a U-shape, reached the maximum around average childbearing ages, and faded out within 15 years after graduation. Low-skilled workers mainly contribute to the negative fertility effects observed in the whole sample. Employment and marital outcomes are also analyzed as potential mechanisms. Estimation results indicate that individuals who experienced poor labor market conditions at graduation delayed marriage and the birth of the first child due to a lower probability of being employed, reduced working hours, and adverse income shocks. The negative long-term fertility effects should be brought to policymakers' attention, especially when China's low fertility issue worsens. Policymakers are expected to create more favorable employment conditions for labor market entrants to encourage fertility and expand the future working-age population.     

Market Efficiency and Profitable Wagering in the National Hockey League: Can Bettors Score on Longshots?

Sports betting and racetrack markets continue to provide researchers with opportunities to test the efficient market hypothesis. This paper investigates the efficiency of a relatively new sports betting market, the National Hockey League, for 1990-1996. The market is found to be somewhat inefficient and simple wagering strategies are identified that result in profitable returns. Consistent with previous research for football and baseball, bettors in hockey are inclined to overbet favorites relative to their observed chance of winning. Interestingly, the market does not appear to be converging to efficiency.     

精彩赛事开启“后奥运时代”

奥帆赛是一座虹桥,让青岛走向了更广阔的世界舞台;奥帆赛是一个起点,让青岛这片海域有了更灿烂的光芒——后奥运时代,诸多国际重大帆船赛事的到来,让青岛的海变得越来越夺目。奥帆赛虽然结束了,但青岛仍然在以"帆船"名扬世界的道路上奋勇前行。经过了奥帆赛的洗礼,青岛具备了良好的硬件设施,拥有举办国际赛事经验的组织团队等优势,有能力并因此吸引了诸多国际大型帆船赛事来青岛办赛。青岛多次成功举办了沃尔沃环球帆船赛青岛站活动、克利伯环球帆船赛青岛站活动、国际极限帆船赛系列和城市俱乐部帆船公开赛等国际帆船赛事,并积极申办2013年和2014年世界杯帆船赛亚洲站比赛——青岛,已经成为亚洲地区引入国际帆船赛事最多、赛事类别最为齐全的国际赛事集聚地。浮山湾畔,海面上点点白帆,在湛蓝大海的衬托下,构成一幅浪漫的画卷。打造"帆船之都"是这座充满激情的城市立下的目标,经过多年的不断努力,如今青岛离成为中国乃至世界知名的海上运动教育、科研、竞赛、训练、休闲中心的梦想越来越近。     

Good Girl,Bad Boy? Evidence Consistent with Collusion in Professional Tennis

We identify professional tennis matches where one player competes for extraordinarily high payoffs while their opposition does not. Players “on the bubble” of direct qualification to upcoming Grand Slam events face substantially higher stakes than opponents, which presents an opportunity for collusion. Our findings produce evidence that is consistent with the hypothesis of unethical behavior taking place on the men's tour, as bubble players are 5.1 percentage points more likely to beat better ranked opponents than in comparable nonbubble matches. However, no such evidence emerges when analyzing women's tennis. We find additional support for the hypothesis of match‐fixing activities on the men's tour from analyzing the occurrence of tie‐breaks and the fact that our results become stronger once monetary incentives were increased after the 2013 season. Finally, the betting market does not predict this phenomenon, further confirming our suspicion of irregular activities.