I spoke recently with Duke University’s Mike Munger for his podcast The Answer is Transaction Costs about my book Fine Margins.
It’s available where ever you get your podcasts but here is a link to the episode and the shows’s website. Here is the Apple podcast link. Spotify link below
Mike is a fantastic host and the conversation covered a wide range of interesting topics including freedom of choice versus morality and regulation issues in gambling, how bookmakers price their products and the evolution and potential future of prediction markets.
The episode’s bullet points give a sense of the range of stimulating and fun topics we covered.
• Karl’s path from macroeconomics and central banking to sports betting research and writing
• COVID soccer without crowds as a natural experiment on home advantage and bookmaker pricing
• gambling morality through freedom, addiction risk, and second-order preferences
• why bans fail and why targeted friction and consumer protection can work better
• gambling versus investing and where derivatives and event contracts fit
• UK legalization, US prohibition history, PASPA, and the post-2018 state-by-state scramble
• why US markets often lack price competition and how lobbying and licensing shape outcomes
• what a sportsbook is and why firms price for profit not for perfectly balanced action
• how minus 110 differs from moneylines, prop bets, parlays, and in-play betting margins
• sharp bettors, profiling, limits, and the transaction costs of trying to beat legal books
• prediction markets, betting exchanges, liquidity, interface design, and why most demand is still sports
• Kalshi, the CFTC, politics and sports contracts, and the state rights conflict heading toward court