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Journal article
Anchoring, affect, and efficiency of sports gaming markets around playoff positioning
Financial Services Review, Vol.24(4), pp.313-329
24
2015
Abstract
We consider the wagering market of NFL and NBA games when participating teams have secured playoff positions. We use both the opening and closing lines (analogous to asset prices) of spread bets to examine if potential “letdown” effects, either psychologically or strategically, are priced. Results demonstrate that the initial opening line consistently provides a profitable strategy for those betting against teams that have clinched positions in the post-season. By the close of the betting cycle, closing lines move in the expected direction as the market partially prices the letdown. Many closing lines tighten to the extent that, after paying commissions, the naïve strategy of betting against clinched teams is less profitable. However, certain wagers, for example betting against NFL teams that have clinched top seeds, are statistically significantly economically profitable after paying commissions. These results support the behavioral finance concepts of anchoring, affect, in addition to lines moving towards efficiency.
Details
- Title
- Anchoring, affect, and efficiency of sports gaming markets around playoff positioning
- Publication Details
- Financial Services Review, Vol.24(4), pp.313-329
- Resource Type
- Journal article
- Publisher
- Academy of Financial Services; United Kingdom
- Series
- 24
- Copyright
- 2015 Academy of Financial Services. All rights reserved.
- Identifiers
- 99380090336406600
- Academic Unit
- Accounting and Finance; Lewis Bear Jr. College of Business
- Language
- English