Please use this identifier to cite or link to this item:
Schnytzer, Adi
Lamers, Martien
Makropoulou, Vasiliki
Year of Publication: 
Series/Report no.: 
Working Papers, Bar-Ilan University, Department of Economics 2009-10
This paper develops a theoretical model that examines the optimal price setting by on-course bookmakers in the racetrack betting market. The model suggests that opening prices should include a premium that compensates bookmakers for the risk that insiders will account for private information and exploit any mis-pricing made by the bookmakers. The model is an extension of the model developed by Makropoulou and Markellos (2007) for football betting to the racetrack betting market. Using an extensive dataset and performing Monte Carlo simulations to calculate the potential value of new information, we measure insider trading in the Australian racetrack betting market.
Document Type: 
Working Paper

Files in This Item:
371.78 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.