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Curricular information is subject to change
Upon completion of this module, you will
• Understand the history of betting markets and how they have changed in recent decades.
• Be able to use betting odds on an event to calculate implied probabilities and the bookmaker’s profit margin.
• Know how to use the economics of decision making under uncertainty to model decisions taken to place money in betting markets.
• Understand how different betting market structures generate different outcomes.
• Be knowledgeable about the empirical literature on outcomes in various betting markets.
• Understand why certain kinds of bets have higher average loss rates than others.
• Be able to evaluate arguments for and against "optimal betting" rules such as the Kelly criterion.
• Be aware of the social issues caused by problem gambling and the policy debates about restrictions on betting.
1. Introduction
2. The past and present of betting markets
3. Basics of betting markets: Odds, margins, win rates, taxation
4. The Law of Large Numbers and the Gambler's Ruin
5. Risk-taking and gambling
6. Disagreement and the wisdom of crowds
7. Pari-mutuel betting and the favourite-longshot bias
8. Efficiencies and inefficiencies in fixed-odds betting markets
9. Competitive fixed-odds bookmakers
10. Monopolistic fixed-odds bookmakers
11. Spread betting and the Asian Handicap market for soccer bets
12. Are bookmakers biased?
13. What determines bookmakers’ margins?
14. Accumulators and proposition bets
15. Inside information in sports betting?
16. Betting exchanges and prediction markets
17. How much to bet? The Kelly criterion
18. More on prediction markets
19. Gambling addiction, social problems and regulation
Student Effort Type | Hours |
---|---|
Lectures | 24 |
Autonomous Student Learning | 80 |
Total | 104 |
There are no formal pre-requisites for this module but it is strongly recommended that students have a good understanding of statistics and also that they have an understanding of intermediate microeconomics material on optimisation of utility and decision-making under uncertainty.
Description | Timing | Component Scale | % of Final Grade | ||
---|---|---|---|---|---|
Assignment: An assignment that covers the basic topics in the economics of betting markets. | Week 8 | n/a | Alternative linear conversion grade scale 40% | No | 30 |
Examination: End of trimester exam | 2 hour End of Trimester Exam | No | Alternative linear conversion grade scale 40% | No | 70 |
Resit In | Terminal Exam |
---|---|
Summer | Yes - 2 Hour |
• Feedback individually to students, on an activity or draft prior to summative assessment
• Group/class feedback, post-assessment
The module co-ordinator will be available throughout the term to provide feedback in relation to preparing for assessments and in relation to how the assessment has been graded.
Lecture | Offering 1 | Week(s) - 20, 21, 22, 23, 24, 25, 26, 30, 31, 32, 33 | Fri 11:00 - 11:50 |
Lecture | Offering 1 | Week(s) - 20, 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33 | Wed 13:00 - 13:50 |