What is the origin or etymology of the term Dutch Book or Dutch Book Arbitrage?

Answer 1

Paul Humphreys, Professor of Philosophy at the University of Virginia has the best answer that I have found at http://people.virginia.edu/~pwh2a/dutch%20book%20origins.doc

He traces the usage of the term back as far as 1942:

"the first edition of The American Thesaurus of Slang. Lester V. Berrey and Melvin van den Bark (eds), New York: Thomas Y. Crowell Company, 1942, p. 691 has this definition:

dutch book, round book; a book with no house percentage

and also (p. 710):

mod(ifier): dutch; no percentage in favor of the bookmaker or operator

indicating a different sense from the modern use."

The Morris Dictionary of Word Origins has no specifc reference to DUtch book, but asserts that "Dutch" has been used by the ENglish as a pejorative dating back to their 17th century colonial rivalry

Answer 2

The term "Dutch Book" originates from the concept of a betting system that guarantees a profit regardless of the outcome. "Dutch Book Arbitrage" refers to a series of bets that ensures a profit by exploiting inconsistent odds offered by different bookmakers. The term is named after the Dutch mathematician L.J.F. Nieuwenhuis, who first described the concept in the field of probability theory.