It’s a Sure Win! Experimental evidence on overconfidence in betting behavior

Publikation: Working paper › Forskning

Standard

It’s a Sure Win! Experimental evidence on overconfidence in betting behavior. / Chegere, Martin; Falco, Paolo; Nieddiu, Marco; Pandolfi, Lorenzo; Stein, Mattea.

2022.

Publikation: Working paper › Forskning

Harvard

Chegere, M, Falco, P, Nieddiu, M, Pandolfi, L & Stein, M 2022 'It’s a Sure Win! Experimental evidence on overconfidence in betting behavior'. <https://ideas.repec.org/p/sef/csefwp/655.html>

APA

Chegere, M., Falco, P., Nieddiu, M., Pandolfi, L., & Stein, M. (2022). It’s a Sure Win! Experimental evidence on overconfidence in betting behavior. https://ideas.repec.org/p/sef/csefwp/655.html

Vancouver

Chegere M, Falco P, Nieddiu M, Pandolfi L, Stein M. It’s a Sure Win! Experimental evidence on overconfidence in betting behavior. 2022 nov. 1.

Author

Chegere, Martin ; Falco, Paolo ; Nieddiu, Marco ; Pandolfi, Lorenzo ; Stein, Mattea. / It’s a Sure Win! Experimental evidence on overconfidence in betting behavior. 2022.

Bibtex

@techreport{3da5d2f5bc844cbd9cbaa50df1358d0c,
title = "It{\textquoteright}s a Sure Win!: Experimental evidence on overconfidence in betting behavior",
abstract = "We conduct an experiment with regular sports bettors in Tanzania to investigate how they value their bets and form expectations about winning probabilities. By comparing a sports bet to a neutral urn-and-balls lottery with identical odds, we find that subjects under the sports framing assign higher subjective values (certainty equivalents) to their bets and are significantly more optimistic about their chances of winning, even though, in fact, they are not more likely to win. This is consistent with bettors being overconfident in their ability to predict sports outcomes. Coupled with data on betting frequency and motives, our results suggest that, by leveraging gamblers{\textquoteright} overconfidence, sports betting magnifies their financial losses.",
keywords = "betting, overconfidence, expectations, framing, sports.",
author = "Martin Chegere and Paolo Falco and Marco Nieddiu and Lorenzo Pandolfi and Mattea Stein",
year = "2022",
month = nov,
day = "1",
language = "English",
type = "WorkingPaper",

}

RIS

TY - UNPB

T1 - It’s a Sure Win!

T2 - Experimental evidence on overconfidence in betting behavior

AU - Chegere, Martin

AU - Falco, Paolo

AU - Nieddiu, Marco

AU - Pandolfi, Lorenzo

AU - Stein, Mattea

PY - 2022/11/1

Y1 - 2022/11/1

N2 - We conduct an experiment with regular sports bettors in Tanzania to investigate how they value their bets and form expectations about winning probabilities. By comparing a sports bet to a neutral urn-and-balls lottery with identical odds, we find that subjects under the sports framing assign higher subjective values (certainty equivalents) to their bets and are significantly more optimistic about their chances of winning, even though, in fact, they are not more likely to win. This is consistent with bettors being overconfident in their ability to predict sports outcomes. Coupled with data on betting frequency and motives, our results suggest that, by leveraging gamblers’ overconfidence, sports betting magnifies their financial losses.

AB - We conduct an experiment with regular sports bettors in Tanzania to investigate how they value their bets and form expectations about winning probabilities. By comparing a sports bet to a neutral urn-and-balls lottery with identical odds, we find that subjects under the sports framing assign higher subjective values (certainty equivalents) to their bets and are significantly more optimistic about their chances of winning, even though, in fact, they are not more likely to win. This is consistent with bettors being overconfident in their ability to predict sports outcomes. Coupled with data on betting frequency and motives, our results suggest that, by leveraging gamblers’ overconfidence, sports betting magnifies their financial losses.

KW - betting

KW - overconfidence

KW - expectations

KW - framing

KW - sports.

M3 - Working paper

BT - It’s a Sure Win!

ER -

ID: 336469027