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The University of Southampton
Centre for Risk Research

Speculative risk taking

A team of researchers in the Centre for Risk Research, including Professor Ming-Chien Sung, Professor Johnnie Johnson, and Dr. Tiejun Ma and several Research Fellows and Phd students are involved in a number of related projects exploring the manner in which information is employed by traders in speculative financial markets. They have particularly focussed on spread trading and betting markets.

Risk is central to sports betting

Their research has led to the development of a range of novel approaches to modelling and predicting the outcomes of competitive events (such as horseraces). These statistical modelling procedures can also be used to predict the choices of consumers and organisations when faced with a range of options. They have also examined the behaviour of traders and bettors, highlighting the heuristics (rules-of-thumb) they employ, which often leads to sub-optimal decisions and mis-pricing in betting and speculative financial markets.

Research in trading behaviours

Specific behavioural issues they have addressed include herding behaviour, the ability of traders and bettors to handle various types of information, including dynamic information and the origins of common biases such as the disposition effect and the favourite-longshot bias.

Leader of World's Most Successful Speculative Trading Syndicate Visits Centre

The Centre for Risk Research was fortunate to secure a two-day visit from Professor William Benter, the founder and leader of the world's most successful speculative trading syndicate.

Find out more

An understanding of the decision to engage in risk-taking activity such as betting is central to helping explain subsequent decision-making behaviours.

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