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Sports forecasting: a comparison of the forecast accuracy of prediction markets, betting odds and tipsters

Spann, Martin and Skiera, Bernd 2009, Sports forecasting: a comparison of the forecast accuracy of prediction markets, betting odds and tipsters, Journal of forecasting, vol. 28, no. 1, pp. 55-72, doi: 10.1002/for.1091.

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Title Sports forecasting: a comparison of the forecast accuracy of prediction markets, betting odds and tipsters
Author(s) Spann, Martin
Skiera, Bernd
Journal name Journal of forecasting
Volume number 28
Issue number 1
Start page 55
End page 72
Total pages 18
Publisher Wiley
Place of publication London, Eng.
Publication date 2009
ISSN 0277-6693
Summary This article compares the forecast accuracy of different methods, namely prediction markets, tipsters and betting odds, and assesses the ability of prediction markets and tipsters to generate profits systematically in a betting market. We present the results of an empirical study that uses data from 678-837 games of three seasons of the German premier soccer league. Prediction markets and betting odds perform equally well in terms of forecasting accuracy, but both methods strongly outperform tipsters. A weighting-based combination of the forecasts of these methods leads to a slightly higher forecast accuracy, whereas a rule-based combination improves forecast accuracy substantially. However, none of the forecasts leads to systematic monetary gains in betting markets because of the high fees (25%) charged by the state-owned bookmaker in Germany. Lower fees (e.g., approximately 12% or 0%) would provide systematic profits if punters exploited the information from prediction markets and bet only on a selected number of games.
Language eng
DOI 10.1002/for.1091
Field of Research 150504 Marketing Measurement
1403 Econometrics
Socio Economic Objective 910403 Marketing
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2008, John Wiley & Sons, Ltd.
Persistent URL http://hdl.handle.net/10536/DRO/DU:30091434

Document type: Journal Article
Collection: Department of Marketing
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