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The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly. / Law, D.; Cain, M.; Peel, David.
In: Manchester School, Vol. 69, No. 2, 03.2001, p. 197-207.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Law, D, Cain, M & Peel, D 2001, 'The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly', Manchester School, vol. 69, no. 2, pp. 197-207. https://doi.org/10.1111/1467-9957.00242

APA

Law, D., Cain, M., & Peel, D. (2001). The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly. Manchester School, 69(2), 197-207. https://doi.org/10.1111/1467-9957.00242

Vancouver

Law D, Cain M, Peel D. The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly. Manchester School. 2001 Mar;69(2):197-207. doi: 10.1111/1467-9957.00242

Author

Law, D. ; Cain, M. ; Peel, David. / The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly. In: Manchester School. 2001 ; Vol. 69, No. 2. pp. 197-207.

Bibtex

@article{01d03f08196f4458b04db41403e3e45d,
title = "The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly",
abstract = "Estimates of insider trading in the betting on individual races, conditional on the Shin model (Economic Journal, Vol. 103 (1993), pp. 1141–1153), are employed in an analysis of the market anomaly observed by Gabriel and Marsden (Journal of Political Economy, Vol. 98 (1990), pp. 874–885) that Tote payments on winning bets consistently exceed those paid by bookmakers. Use of more appropriate statistical methods suggests that the original anomaly disappears, but that another remains: bookmakers pay more generously than the Tote on winning bets on favourites, but less generously on winning longshot bets. This discrepancy is shown to be associated with the incidence of insider trading in the betting on each race, and it is argued that it cannot be arbitraged away because of the bookmakers{\textquoteright} dominant market position.",
author = "D. Law and M. Cain and David Peel",
year = "2001",
month = mar,
doi = "10.1111/1467-9957.00242",
language = "English",
volume = "69",
pages = "197--207",
journal = "Manchester School",
issn = "1463-6786",
publisher = "Wiley-Blackwell",
number = "2",

}

RIS

TY - JOUR

T1 - The Incidence of Insider Trading in Betting Markets and the Gabriel and Marsden Anomaly

AU - Law, D.

AU - Cain, M.

AU - Peel, David

PY - 2001/3

Y1 - 2001/3

N2 - Estimates of insider trading in the betting on individual races, conditional on the Shin model (Economic Journal, Vol. 103 (1993), pp. 1141–1153), are employed in an analysis of the market anomaly observed by Gabriel and Marsden (Journal of Political Economy, Vol. 98 (1990), pp. 874–885) that Tote payments on winning bets consistently exceed those paid by bookmakers. Use of more appropriate statistical methods suggests that the original anomaly disappears, but that another remains: bookmakers pay more generously than the Tote on winning bets on favourites, but less generously on winning longshot bets. This discrepancy is shown to be associated with the incidence of insider trading in the betting on each race, and it is argued that it cannot be arbitraged away because of the bookmakers’ dominant market position.

AB - Estimates of insider trading in the betting on individual races, conditional on the Shin model (Economic Journal, Vol. 103 (1993), pp. 1141–1153), are employed in an analysis of the market anomaly observed by Gabriel and Marsden (Journal of Political Economy, Vol. 98 (1990), pp. 874–885) that Tote payments on winning bets consistently exceed those paid by bookmakers. Use of more appropriate statistical methods suggests that the original anomaly disappears, but that another remains: bookmakers pay more generously than the Tote on winning bets on favourites, but less generously on winning longshot bets. This discrepancy is shown to be associated with the incidence of insider trading in the betting on each race, and it is argued that it cannot be arbitraged away because of the bookmakers’ dominant market position.

U2 - 10.1111/1467-9957.00242

DO - 10.1111/1467-9957.00242

M3 - Journal article

VL - 69

SP - 197

EP - 207

JO - Manchester School

JF - Manchester School

SN - 1463-6786

IS - 2

ER -