HOME BIAS AND INTERNATIONAL BETTING MARKETS: CAN INSTITUTIONAL CONSTRAINTS AND BEHAVIORAL BIASES LEAD TO ARBITRAGE PROFITS?

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Ludwig Chincarini
Christina Contreras

Abstract

The international sports betting markets are becoming more global, but there is still a large concentration of local bettors in gambling markets of individual countries. Home loyalty and other patterns of human behavior might lead to odds for international competitions being different in different countries with less favorable odds being quoted in the home country; the home bias effect. In this paper we explain the logic of this phenomena and examine a small data set to show the existence of the bias in three different sports: tennis, golf, and European football. We also suggest ideas for a more thorough investigation of the home bias phenomenon.

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References

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