Cricket: A case of irrational exuberance?
In asset markets, irrational exuberance offers space to profit from it if one can bet on a correction forced by a reality check. The more inflated a price is, the bigger the chance to make a buck.
A similar opportunity has long been suspected to exist in an illegal market for betting on cricket match outcomes, with the odds offered by sundry bookies often reckoned to be reflective of a nationalist over-bet in favour of the home side. With a gap identified between the overall market’s gamble and a rational analysis of a team’s win likelihood, a squirmy thrill was said to lie in laying a secret wager on the other side’s victory.
In such a scenario, Sunday’s one-day men’s cricket World Cup final clash of India-versus-Australia would’ve made for a very high-risk, high-return contrarian punt, given how heavily the Indian team was expected to win. We have no numbers on any of this, as these gambles do not formally exist.
Not that they should be legalized, but a fantasy data-based dashboard of the market’s view of which way a game will go would be fascinating. In this match, Indian exuberance seemed quite rational going in.
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