@article{2624, author = {José Aizpurua Agirre and Loreto Erviti Llorente}, title = {A Betting Market: Description and a theoretical explanation of bets in Pelota Matches}, abstract = {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.}, year = {2008}, journal = {Documentos de Trabajo (Universidad Pública de Navarra. Departamento de Economía) Nº3}, volume = {64}, pages = {421-446}, doi = {10.1007/s11238-007-9060-4}, language = {ENG}, }