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Article

Parimutuel betting on the eSports duels: Evidence of the reverse favourite-longshot bias

Journal of Economic Psychology. 2021. P. 102305.
Dagaev D., Stoyan E.

We analyse betting behaviour patterns of the visitors of the specialized betting website dedicated to the popular eSports game \textit{Counter-Strike: Global Offensive}. The reverse favourite-longshot bias is found, which is rather unusual for parimutuel betting markets, where favourite-longshot bias is more common. We define simple betting strategies based on the bets on underdogs and show that these strategies make a sufficiently large positive profit both on the in-sample and out-of-sample datasets, which is a sign of market inefficiency. In matches with popular underdogs, the sentiment bias decreases the market inefficiency caused by the reverse favourite-longshot bias. At the same time, the role of the geographical location of teams in the reverse favourite-longshot bias is only marginal.