Discussion paper
DP17949 Forecasting Soccer Matches With Betting Odds: A Tale of Two Markets
We compare the properties of betting market odds set in two distinct markets for a large sample of European soccer matches. We confirm inefficiencies in the traditional market for bets on a home win, an away win or a draw as found in previous studies such as Angelini and De Angelis (2019), in particular that there is a strong pattern of favourite-longshot bias. Conversely, we document how a betting market that has emerged in recent years, the Asian handicap market, can generate efficient forecasts for the same set of matches using a new methodology for mapping its odds into probabilities.
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