The method we use for the comparison is new and has two advantages. In this paper, we compare these two methods in two betting markets on soccer games. Another, less frequently used method, is Shin’s model, which endogenously accounts for a possible favourite-longshot bias. Implied winning probabilities are usually derived from betting odds by the normalization: inverse odds are divided by the booksum (sum of the inverse odds) to ensure that the implied probabilities add up to 1.
