Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/222982
Authors: 
Fischer, Kai
Haucap, Justus
Year of Publication: 
2020
Series/Report no.: 
DICE Discussion Paper 349
Abstract: 
Betting markets have been frequently used as a natural laboratory to test the efficient market hypothesis and to obtain insights especially for financial markets. We add to this literature in analyzing the velocity and accuracy in which market expectations adapt to an exogenous shock: the introduction of soccer ghost games during the COVID-19 pandemic. We find that betting odds do not properly reflect the effect of ghost games regarding changes in home advantage. Furthermore, we present evidence for a slow to non-existing adaption process with respect to new match results, indicating a lack of semi-strong efficiency. Based on these findings, we also identify very simple but highly profitable betting strategies which underline our rejection of the efficient market hypothesis.
Subjects: 
Home Advantage
Betting Market
Efficient Market Hypothesis
Ghost Games
JEL: 
G14
Z20
Z21
Z23
ISBN: 
978-3-86304-348-3
Document Type: 
Working Paper

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