'It ain't over till it's over' : Yogi Berra bias on prediction markets

Page, Lionel (2012) 'It ain't over till it's over' : Yogi Berra bias on prediction markets. Applied Economics, 44(1), pp. 81-92.

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The recent expansion of prediction markets provides a great opportunity to test the market efficiency hypothesis and the calibration of trader judgements. Using a large database of observed prices, this article studies the calibration of prediction markets prices on sporting events using both nonparametric and parametric methods. While only minor bias can be observed during most of the lifetime of the contracts, the calibration of prices deteriorates very significantly in the last moments of the contracts’ lives. Traders tend to overestimate the probability of the losing team to reverse the situation in the last minutes of the game.

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ID Code: 53891
Item Type: Journal Article
Refereed: Yes
Additional URLs:
DOI: 10.1080/00036846.2010.498578
ISSN: 0003-6846
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2012 Taylor & Francis
Deposited On: 28 Sep 2012 01:19
Last Modified: 03 Oct 2012 04:43

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