You are not currently logged in.
Access JSTOR through your library or other institution:
If You Use a Screen ReaderThis content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Why is There a Favourite-Longshot Bias in British Racetrack Betting Markets
Leighton Vaughan Williams and David Paton
The Economic Journal
Vol. 107, No. 440 (Jan., 1997), pp. 150-158
Stable URL: http://www.jstor.org/stable/2235276
Page Count: 9
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Preview not available
In this paper we employ a large new data set to examine explanations of the tendency for favourites to be under-bet and longshots over-bet in recent British racetrack betting markets. We demonstrate that both demand and supply side factors can explain this favourite--longshot bias and propose new empirical tests to identify the influence of insider trading on the bias. The results suggest that the adverse selection problem faced by bookmakers, in the context of bettors who may possess superior information, is capable of explaining at least some of the observed bias.
The Economic Journal © 1997 Royal Economic Society