Suchergebnisse

In their article in the current issue of this journal, Sauer et al. compare the evolution of prices of in-game betting markets of baseball games to an empirical model of scoring based on the probability of various game events occurring. The authors correctly suggest this in-game betting market provides an opportunity to examine the efficiency of gambling markets, as the value of the security being examined can be known with a greater degree of precision than the fundamental value of securities being traded in general financial markets. While we appreciate the progress that has occurred, we believe that with some fairly simple changes, the authors may be able to improve the precision of their model to the point where a more powerful commentary on potential market efficiency could be developed. We offer suggestions on more precisely matching of the two sources of data, timing of the events, and dealing with games in which there is a clear pre-game favorite. We close with suggestions for extensions. Adapted from the source document.