Corpus ID: 53970017

Optimal Determination of Bookmakers' Betting Odds: Theory and Tests

@inproceedings{Fingleton1996OptimalDO,
  title={Optimal Determination of Bookmakers' Betting Odds: Theory and Tests},
  author={J. Fingleton and P. Waldron},
  year={1996}
}

J. Fingleton, P. Waldron

Published 1996

Economics

This paper develops a theoretical model of how bookmakers' odds are determined, given varying levels of inside information on the part of punters. Bookmakers' attitudes towards risk and the degree of competition between them will influence bookmaker behaviour. Using a data set of 1,696 races in Ireland in 1993, we find that bookmakers are extremely risk-averse, and estimate that operating costs and monopoly rents combined account for up to 4 per cent of turnover and that between 3.1 and 3.7 per… CONTINUE READING

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