The Importance of Betting Early

LABSI Working Paper No. 37/2012

28 Pages Posted: 6 Feb 2012 Last revised: 5 Nov 2013

See all articles by Alessandro Innocenti

Alessandro Innocenti

University of Siena - Labsi Experimental Economics Laboratory; University of Siena - Department of Social, Political and Cognitive Sciences

Tommaso Nannicini

Bocconi University - Department of Economics; IZA Institute of Labor Economics

Roberto Ricciuti

University of Verona - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 5, 2013

Abstract

We evaluate the impact of timing on decision outcome, when both the timing and the relevant decision are chosen under uncertainty. Betting markets provide the testing ground, as we exploit an original dataset containing more than one million online bets on games of the Italian Major Soccer League. We find that individuals perform systematically better when they place their bets farther away from the game day. The better performance of early bettors holds controlling for (time-invariant) unobservable ability, learning during the season, and timing of the odds. We attribute this result to the increase of noisy information on game day, which hampers the capacity of late (non-professional) bettors to use very simple prediction methods, such as team rankings or last game results. We also find that more successful bettors tend to bet in advance, focus on a smaller set of events, and prefer events associated with smaller betting odds.

Keywords: decision timing, information overload, betting, sports forecasting

JEL Classification: D81, D83

Suggested Citation

Innocenti, Alessandro and Nannicini, Tommaso and Ricciuti, Roberto, The Importance of Betting Early (November 5, 2013). LABSI Working Paper No. 37/2012, Available at SSRN: https://ssrn.com/abstract=1999459 or http://dx.doi.org/10.2139/ssrn.1999459

Alessandro Innocenti (Contact Author)

University of Siena - Labsi Experimental Economics Laboratory ( email )

Piazza Mattioli 10
Siena, Siena 53100
Italy

HOME PAGE: http://www.labsi.org

University of Siena - Department of Social, Political and Cognitive Sciences ( email )

Via Roma 56
Siena, Siena I-53100
Italy
39 338 5724318 (Phone)
39 0577 232793 (Fax)

HOME PAGE: http://www.labsi.org/innocenti/

Tommaso Nannicini

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Roberto Ricciuti

University of Verona - Department of Economics ( email )

Via dell'Artigliere, 8
37129 Verona
Italy

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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