Abstract
Introduction The purpose of this chapter is to shed light on the functioning of a market for state-contingent claims with inside traders. In contrast to US horse betting markets, 1 in the UK market, betting on-course takes place with both a pari-mutuel and bookmakers, the latter offering bets at fixed prices. Further, off-course, it is possible to bet by amethod known as SP, wherebywinning bets are paid at the equilibrium closing prices in the bookmakers’ market on-course (known as Starting Prices). As in many other betting markets, a favorite-longshot bias is observed throughout the duration of the on-course market. A favorite-longshot bias implies that favorites are underpriced relative to longshots.
| Original language | English |
|---|---|
| Title of host publication | The Economics of Gambling |
| Publisher | Taylor and Francis |
| Pages | 14-17 |
| Number of pages | 4 |
| ISBN (Electronic) | 0203986938, 9781134508389 |
| ISBN (Print) | 0415260914, 9780415260916 |
| DOIs | |
| State | Published - 1 Jan 2005 |
Bibliographical note
Publisher Copyright:© 2003 Leighton Vaughan Williams for selection and editorial matter.