Dear nickleby-ga,
I have found the following explanation for Quarbs from an article on
Warwick University?s web site.
?The two economists [Dr David Paton and Dr Leighton Vaughan Williams]
describe cases where companies offer prices that are different but not
necessarily far enough apart for an arbitrage as ?Quasi-arbitrages? or
?Quarbs?. Dr Paton commented:
?Quarbs are more common than true arbitrages, and spread bookmakers
are much less likely to restrict the number of bets on them. Although
betting on a Quarb does not guarantee you a profit, we found 140 cases
during the last two Premier League seasons. Of these, 86 would have
been winning bets and only 50 would have lost. A punter staking a
modest £5 per point in each case would have won almost £5,000 over the
two years.? ?
http://www.warwick.ac.uk/res2002/consumers-all.htm
This is the paper tilted ?Quarbs? and Efficiency in Spread Betting:
can you beat the book? by Dr David Paton and Dr Leighton Vaughan
Williams, referred to above. (21 pages)
?In particular, we consider the setting of a price by one company that
is everywhere outside the mid-point of the spreads of all
market-makers combined. We term such a price a ?quasi-arbitrage? or
?Quarb? and ask whether it can provide useful information to bettors.?
(page 3)
http://repec.org/res2002/Paton.pdf
You may also wish to read the BBC news article discussing the article.
?The economists have coined a new phrase - the "quarb" or
quasi-arbitrage - to identify cases where companies offer prices that
are different but not so far apart from the others that the bookies
bring in an arbitrage.?
http://news.bbc.co.uk/1/hi/uk_politics/1897293.stm
I hope this answers your question. If it does not, or the answer is
unclear, then please ask for clarification of this research before
rating the answer. I shall respond to the clarification request as
soon as I receive it.
Thank you
answerfinder
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