TY - JOUR
AU - José Aizpurua Agirre
AU - Loreto Erviti Llorente
AB - In Pelota matches, bets are made between viewers through a middleman who receives 16\% of the finally paid amount. In this paper, a description of the way bets are made and an explanation of the existence of those markets are presented. Taking betting markets as a simplified analogy for financial markets we have searched for the explanation in a world where both sides of the market are not different in believes and preferences. We find that for a bet to exist when bettors are rank dependent expected utility maximizers, they have to be optimistic. Taking observations from actually made bets a preliminary analysis about the biases of those markets is presented.
BT - Documentos de Trabajo (Universidad Pública de Navarra. Departamento de Economía) Nº3
DO - 10.1007/s11238-007-9060-4
LA - ENG
N2 - In Pelota matches, bets are made between viewers through a middleman who receives 16\% of the finally paid amount. In this paper, a description of the way bets are made and an explanation of the existence of those markets are presented. Taking betting markets as a simplified analogy for financial markets we have searched for the explanation in a world where both sides of the market are not different in believes and preferences. We find that for a bet to exist when bettors are rank dependent expected utility maximizers, they have to be optimistic. Taking observations from actually made bets a preliminary analysis about the biases of those markets is presented.
PY - 2008
SP - 421
EP - 446
T2 - Documentos de Trabajo (Universidad Pública de Navarra. Departamento de Economía) Nº3
TI - A Betting Market: Description and a theoretical explanation of bets in Pelota Matches
VL - 64
ER -