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Richard Borghesi


This study examines the pre-game and within-game price movements of contracts listed on Tradesports to determine whether relevant information is quickly and accurately embedded into asset prices.  Each contract represents a totals (over/under) bet on an NFL game.  In traditional casino-style totals betting markets, it has been demonstrated that the effects of adverse weather conditions are not fully incorporated into totals bet prices.  If prediction markets are more efficient that are traditional NFL betting markets, then this price bias should be mitigated.  We find that while price biases disappear quickly after kickoff, prior to this point they remain largely intact suggesting that casino-style markets and prediction markets may have similar informational limitations.

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