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Winners and losers in Soccer World Cup: a study of recent history and how to bet if you must

AuthorsArchontakis, Fragiskos
KeywordsSports economics
Issue Date31-May-2004
Citation4th International Conference on Sports, Tourism and Culture (Athens, Greece, 2004)
AbstractFootball betting in Europe has seen a rapid growth in the last two decades. However, the betting market seems to be rather inert in becoming an efficient market in a similar fashion as inefficiencies have been appearing in the international financial markets. A typical fixed odds set provided by the bookmaker for the result of a soccer match would be: (odds for home team win, odds for draw, odds for away team win). The present work differentiates itself from the others in the relevant literature in the mere fact that the only outcome of probabilistic interest is chosen to be the draw, that is, the most difficult to predict-see Pope and Peel (1989). The FIFA World Cup is considered to be the most important soccer tournament between national teams from all over the world and is taking place every four years. The data used in the present study come from a 20-year span of World Cup Final Tournaments. Typically the odds include the bookmaker’s in-built “take” margin, usually in the range of 11-15%. In order for the gambler to make money out of betting he has to be able to determine the true probabilities of a soccer game better than the bookmaker in order to overcome the bookmakers’ profit margin. The estimate for the probability of a draw in a World Cup Final Tournament is found to be 29,76%, which is in agreement with similar results; see for example Dixon and Coles (1997). A simple mathematical sequence, known as the Fibbonacci sequence, is used in order to define a consistent betting strategy. It will be shown that for fixed odds given for a draw equal to the value 2.618, the betting rule proposed is giving always at least a unit of profit. Nevertheless, the average for a fixed odds is greater than 3.0, thus we consider the odds also as a random variable and the model is implemented by a Monte Carlo simulation.
Description17 pages, 3 figures, 4 tables.-- JEL classification codes: L83, C15.-- Contributed to: 4th International Conference on Sports, Tourism and Culture (Athens, Greece, May 31-Jun 2, 2004).
Appears in Collections:(INGENIO) Comunicaciones congresos
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