The Economics of Wagering Markets
Raymond D. Sauer · Journal of Economic Literature
Main finding
To a first approximation, wagering prices are efficient forecasts of outcomes and absorb information as lines move, while documented exceptions such as the favourite–longshot bias remain important.
Limitations
Pre-dates online bookmakers and betting exchanges. A short correction (1999) clarified one attribution in the review.
Study details
- Authors
- Raymond D. Sauer
- Published
- 1998
- Venue
- Journal of Economic Literature 36(4), 2021–2064
- Status
- Published
- Evidence type
- Literature review
- Evidence strength
- Strong (our assessment of how much weight the finding can bear)
- Sport
- Horse racing, North American team sports and lotteries
- Markets
- Pari-mutuel, bookmaker and point-spread markets
- Method
- Survey of theoretical and empirical research on whether wagering prices are efficient forecasts.
- Sample
- Literature published up to 1998.
- Replication
- Not applicable (review).
Read the original
https://ideas.repec.org/a/aea/jeclit/v36y1998i4p2021-2064.html (opens in a new tab)
Our summary is an original paraphrase for education. Verification: Bibliographic record checked against publisher, index or author listings. No DOI is listed. Checked 2026-10-25.