Betting in the Shadow of Match-Fixing

Parimal Bag and Bibhas Saha

No 11, University of East Anglia Applied and Financial Economics Working Paper Series from School of Economics, University of East Anglia, Norwich, UK.

Abstract: 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.

Keywords: Sports betting; bookie; punters; corruption; match-fixing; lemons problem (search for similar items in EconPapers)
JEL-codes: D42 K42 (search for similar items in EconPapers)
Date: 2010-07-05
New Economics Papers: this item is included in nep-sea and nep-spo
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