Bettor Misperceptions in the NBA: The Overbetting of Large Favorites and the “Hot Hand”

Rodney J. Paul, Andrew P. Weinbach

Research output: Contribution to journalArticle

34 Scopus citations

Abstract

Systematic bettor misperceptions are found in the NBA point spread gambling market for the seasons of 1995-1996 to 2001-2002. Evidence of the overbetting of favorites is found, with a strategy of betting big underdogs rejecting the null of a fair bet. Betting big home underdogs not only rejects a fair bet but is also shown to reject the null of no profitability. In addition, betting against winning streaks, as first suggested in the “hot-hand” article of Camerer and later tested by Brown and Sauer, is also shown to be profitable.

Original languageEnglish (US)
Pages (from-to)390-400
Number of pages11
JournalJournal of Sports Economics
Volume6
Issue number4
DOIs
StatePublished - Nov 2005
Externally publishedYes

Keywords

  • efficient markets
  • gambling
  • sports

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

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