Monopoly rents and price fixing in betting markets

Paton, D. and Vaughan Williams, L. ORCID: 0000-0002-9639-9217, 2001. Monopoly rents and price fixing in betting markets. Review of Industrial Organization, 19 (3), pp. 265-278. ISSN 0889-938X

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Abstract

Betting markets provide an ideal environment in which to examine monopoly power due to the availability of detailed information on product pricing. In this paper we argue that the pricing strategies of companies in the UK betting industry are likely to be an important source of monopoly rents, particularly in the market for forecast bets. Pricing in these markets are shown to be explicitly coordinated. Further, price information is asymmetrically biased in favor of producers. We find evidence, based on UK data, that pricing of CSF bets is characterized by a significantly higher markup than pricing of single bets. Although this differential can in part be explained by the preferences of bettors, it is reasonable to attribute a significant part of the differential as being due to monopoly power.

Item Type:	Journal article
Description:	The original publication is available at www.springerlink.com
Publication Title:	Review of Industrial Organization
Creators:	Paton, D. and Vaughan Williams, L.
Publisher:	Springer Verlag
Date:	2001
Volume:	19
Number:	3
ISSN:	0889-938X
Identifiers:	Number Type 10.1023/A:1011828216881 DOI
Divisions:	Schools > Nottingham Business School
Record created by:	EPrints Services
Date Added:	09 Oct 2015 10:57
Last Modified:	09 Jun 2017 13:45
URI:	https://irep.ntu.ac.uk/id/eprint/20529

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