Why is house edge smaller on big favs lines?

[noober]

I noticed that the bookmaker's edge is much smaller when there is a big favourite involved.
For example, when the odds are 1.001 for the fav and 63 for the dog the edge is 1.49%. On the other hand, if you have odds of 1.96 and 1.96 (which to me seems much more fair) the edge is 2.04%.

Is there any explanation for that or am I confused? Thank you.

[noober]

Anyone? That queston has been bothering me for a while.

[BigdaddyQH]

I think your question needs clarification. Where did you come up with those numbers? What do they represent? I am having problems determining what you want answered.

[noober]

If you have odds of 1.85 and 1.85 the overround (house edge) will be 1/1.85 + 1/1.85 = 8.1%. But as the spread between the favourite's line and the dog's line increase the overround will decrease as well. For odds of 1.1 and 7 the overround is 1/1.1+1/7 = 5.2%. For odds of 1.001 and 100 you have overround of only 0.89%. This makes me wonder if you are better off betting on lines with big spread.

[noober]

In this thread Ganchrow defines theoretical hold to be the expected value of the line offered by the bookmaker.

http://forum.sbrforum.com/handicapper-think-tank/12142-introduction-expectations-theoretical-hold.html

So for the odds I mentioned, the theoretical hold will be:
For 1.85 and 1.85: 7.5%
For 1.1 and 7: 4.9%
For 1.001 and 100: .88%

Similarly, the theoretical hold decreases as the spread of the line increases and I have no explanation why that happens. Hopefully my question is clear now.

[Hybris]

Nvm didnt understand your question. Someone smarter then me will have a better answer..

[RickySteve]

Unsophisticated bettors are generally put off by seemingly large absolute differences between back and lay prices. The bookmaker must balance this perception with maintaining her hold. A surprising number of bookmakers probably fail to completely grasp the concept of theoretical hold themselves.

[david.lee264]

Because its better being small in this reason. So they are made smaller.

[noober]

So do you think a bettor is better off developing strategies for bets with large absolute differences between back and lay prices? In this case, the expected value is approximately -1% compared to approximately -5% when the lay and back odds are very close. It seems easier to beat 1% than 5% but I haven't noticed a tendency of pro bettors focusing on bets with large absolute differences between back and lay prices.