Match-fixing under competitive odds

Two bookmakers compete in Bertrand fashion while setting odds on the outcomes of a sporting contest where an influential punter (or betting syndicate) may bribe some player(s) to fix the contest. Zero profit and bribe prevention may not always hold together. When the influential punter is quite powe...

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Bibliographic Details
Published in:Games and economic behavior 2011-11, Vol.73 (2), p.318-344
Main Authors: Bag, Parimal Kanti, Saha, Bibhas
Format: Article
Language:English
Subjects:
Bookie
Bribery
Corruption
Economic models
Economic theory
Gambling
Game theory
Lemons problem
Match-fixing
Microeconomics
Professional sports
Profits
Punters
Sports
Sports betting
Studies
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Summary:Two bookmakers compete in Bertrand fashion while setting odds on the outcomes of a sporting contest where an influential punter (or betting syndicate) may bribe some player(s) to fix the contest. Zero profit and bribe prevention may not always hold together. When the influential punter is quite powerful, the bookies may coordinate on prices and earn positive profits for fear of letting the ‘lemons’ (i.e., the influential punter) in. On the other hand, sometimes the bookies make zero profits but also admit match-fixing. When match-fixing occurs, it often involves bribery of only the strong team. The theoretical analysis is intended to address the problem of growing incidence of betting related corruption in world sports including cricket, horse races, tennis, soccer, basketball, wrestling, snooker, etc. ► Match-fixing in sports is analyzed. ► Bookies select betting odds that may induce or prevent match-fixing. ► Match-fixing concern may lead to price coordination and positive profits for bookies. ► When match-fixing occurs, usually the favorite team will be bribed.
ISSN:0899-8256
1090-2473
DOI:10.1016/j.geb.2011.03.001