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The Empirical Analysis of Efficiency of Wagering Market
Flegr, Jan ; Hronza, Martin (advisor) ; Koubek, Ivo (referee)
Aim of this diploma thesis is to provide empirical tests of market efficiency of tennis wagering market. In large dataset, which consists of nearly 47 thousands matches and 225 thousands odds, I am searching for anomalies, which can prove market inefficiency. Potentially profitable and exploitable betting strategies are also examined. Main tools of empirical analysis are linear probability models and logit models. Favorit-longshot bias is present in my data, this finding is consistent with results of other empirical works (Lahvička, 2013; Cain, Law, Peel, 2000). Major contribution of this paper is confirmation of home-away bias, the issue, which was not tested in tennis matches so far. The same holds for chart-bias. I am not able to find profitable wagering rules based on out-of-sample predictions of my models. Simple betting rule, which consists of betting systematically on overwhelming favorites, is derived from historical odds. This strategy yields a profit 0,0094, but it's applicability is very limited.
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Analysis of drug prohibition and estimation of budgetary implications of marijuana legalization
Flegr, Jan ; Hudík, Marek (advisor) ; Bartoň, Petr (referee)
This paper examines the impact of drug prohibition on society. It analyzes starting-points and aims of prohibition and shows, how prohibition attempts to achieve its goals. Furthermore, it explores social costs of prohibition, mainly the impact on potencial health risks of drug use and property and violent crimes. Then it presents main reasons of failure to achieve its goals. Furthemore, this paper estimates probable budgetary implications of marijuana legalization. This estimate is based on quantification of direct costs of marijuana law enforcement. Finally, it estimates the tax revenue that would result from marijuana legalization. For this purpose it also estimates the impact of legalization on price and consumption of marijuana.
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