Longshot Bias — Evidence from Betting on UK Premier League Matches

This study explores the longshot bias phenomenon in the context of soccer betting, focusing on the betting behaviors of English Premier League fans in Kenya and the United Kingdom. Using data from two field experiments involving 2,410 participants collected for a separate study (Donkor et al., 2023), this research investigates how subjective beliefs and preferences influence bettors' decisions, revealing that both biased beliefs and preferences contribute to the longshot bias. Participants tend to underestimate the win probabilities of favored teams and overestimate those of underdogs, affecting their betting allocations accordingly. Conditional on betting odds and subjective beliefs, participants also tend to allocate smaller (larger) bets on favored (underdog) teams winning a given match. This research underscores the importance of understanding and addressing the underlying cognitive and psychological factors driving longshot bias to foster more rational betting practices.