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| David Alan Peel |
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| ''On the Implications of the Markowitz Model of Utility embodying Gain Seeking Preferences for Odds on Betting and Bookmakers choice of Spread or Odds Betting'' |
| ( 2013, Vol. 33 No.2 ) |
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| We demonstrate in a parametric formulation of the Markowitz model of utility that unless agents are initially gain seeking they will not bet on heavily odds on favorites for a given negative expected rate of return. The model supports Sauer's (1998) observation that it may not be profitable to make a market in contests involving heavy odds on favorites with implications for bookmakers choice of spread or odds markets in sports betting. |
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| Keywords: Markowitz model of utility, Gain seeking preferences, limits to odds on betting, bookmaker choice of spreads versus odds markets, lopsided contests |
JEL: D8 - Information, Knowledge, and Uncertainty: General
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| Manuscript Received : Apr 19 2013 | | Manuscript Accepted : Jun 10 2013 |
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