Betting on a Buzz, Mispricing and Inefficiency in Online Sportsbooks

22 Pages Posted: 6 Apr 2022 Last revised: 27 Jul 2022

See all articles by Philip Ramirez

Philip Ramirez

University of Reading

James Reade

University of Reading

Carl Singleton

Department of Economics, University of Reading

Date Written: March 18, 2022

Abstract

Bookmakers sell claims to bettors that depend on the outcomes of professional sports events. Like other financial assets, the wisdom of crowds could help sellers to price these claims more efficiently. We use the Wikipedia profile page views of professional tennis players involved in over ten thousand singles matches to construct a buzz factor. This measures the difference between players in their pre-match page views relative to the usual number of views they received over the previous year. The buzz factor significantly predicts mispricing by bookmakers. Using this fact to forecast match outcomes, we demonstrate that a strategy of betting on players who received more pre-match buzz than their opponents can generate substantial profits. These results imply that sportsbooks could price outcomes more efficiently by listening to the buzz.

Keywords: Wisdom of crowds, Betting markets, Efficient Market Hypothesis, Forecast efficiency, Professional tennis

JEL Classification: G14, G41, L83

Suggested Citation

Ramirez, Philip and Reade, James and Singleton, Carl, Betting on a Buzz, Mispricing and Inefficiency in Online Sportsbooks (March 18, 2022). International Journal of Forecasting, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4060984 or http://dx.doi.org/10.2139/ssrn.4060984

Philip Ramirez

University of Reading ( email )

Whiteknights
Reading, Berkshire RG6 6AH
United Kingdom

James Reade

University of Reading

Carl Singleton (Contact Author)

Department of Economics, University of Reading ( email )

Whiteknights
Reading, Berkshire RG6 6AH
United Kingdom

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