Analyzing football betting behavior using prospect theory

Abstract

In this study, bets on football matches are taken into consideration and attitudes of bettors towards risk are examined using Prospect Theory. Before the match, the odds of bets are determined by the betting companies (i.e. bookmakers), considering a variety of factors, and bets are presented for people to play. If people are placing on a particular bet, the odds are instantly revised by the bookmakers. These changes are reflected in the system by updating the odds as long as the bets remain open. In the scope of the study, only bets on the result of the match (i.e. the win of the home team, draw and win of the away team) were considered. Accordingly, the people were asked to indicate the odds and possible earnings attracting them to place a bet on a particular result among those three or result in dropping a bet, and the answers were analyzed in accordance with the Prospect Theory principles.