Betting on Momentum in Contests

Citation

Otting M, Deutscher C, Singleton C & De Angelis L (2025) Betting on Momentum in Contests. Economic Inquiry. https://doi.org/10.1111/ecin.70008

Abstract
With unprecedented access to volumes and prices of state-contingent claims by a major bookmaker, second-by-second in-play football betting markets, we study what happens after major breaking news. We focus on what might look like a shift in momentum to a bettor: equalising goals. Immediately after this news breaks, the volume of claims sold on the match outcomes increases and is substantially biased towards the equalising team. But there is no evidence that the prices or values of these claims are functions of whichever team scored last. These findings illustrate the value of integrating high-frequency price and quantity data to evaluate the efficiency and profitability of betting markets.

Keywords
behavioral bias; betting markets; expectations; market efficiency; risk-taking

• Betting on Momentum in Contests