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Match‐Fixing in a Monopoly Betting Market
Author(s) -
Bag Parimal Kanti,
Saha Bibhas
Publication year - 2016
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12172
Subject(s) - monopoly , contest , odds , set (abstract data type) , competition (biology) , economics , microeconomics , business , computer science , political science , logistic regression , law , biology , ecology , programming language , machine learning
A monopolist bookmaker may set betting odds on a fairly even contest to induce match‐fixing by an influential corrupt punter. His loss to the corrupt punter is more than made up for by enticing enough ordinary punters to bet on the losing team. This result is in sharp contrast to competitive bookmaking, where even contests have been shown to be immune to fixing. The analysis also reveals a surprising result that the incidence of match‐fixing can dramatically fall when match‐fixing opportunities rise. This is shown by comparing two scenarios—when only one team is corruptible and when both are corruptible. For both teams corruptible, the bookmaker is uncertain about to which team the influential punter will have access, so carefully maneuvering the odds to induce match‐fixing is too costly.