Consumption benefits and gambling: Evidence from the NCAA basketball betting market

Brad R. Humphreys; Rodney J. Paul; Andrew P. Weinbach

doi:10.1016/j.joep.2013.05.010

Consumption benefits and gambling: Evidence from the NCAA basketball betting market

Brad R. Humphreys, Rodney J. Paul, Andrew P. Weinbach

Research output: Contribution to journal › Article › peer-review

27 Scopus citations

Abstract

The utility of gambling model posits that consumption benefits lead rational agents to gamble when faced with negative expected financial returns. We analyze the determinants of bet volume and dollars bet on NCAA basketball games from three on-line sports books to test the predictions of this model. Betting action depends on television coverage, team quality, and the expected closeness of the contest. Our results support the notion that consumption benefits, not financial gain, motivate gambling. Preferences of bettors appear similar to those of sports fans, suggesting that models of gamblers as wealth-maximizing investors may not explain observed betting behavior.

Original language	English (US)
Pages (from-to)	376-386
Number of pages	11
Journal	Journal of Economic Psychology
Volume	39
DOIs	https://doi.org/10.1016/j.joep.2013.05.010
State	Published - Dec 2013
Externally published	Yes

Keywords

Bet volume
Consumption value
Dollars bet
Gambling
Sports betting

ASJC Scopus subject areas

Applied Psychology
Sociology and Political Science
Economics and Econometrics

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10.1016/j.joep.2013.05.010

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title = "Consumption benefits and gambling: Evidence from the NCAA basketball betting market",

abstract = "The utility of gambling model posits that consumption benefits lead rational agents to gamble when faced with negative expected financial returns. We analyze the determinants of bet volume and dollars bet on NCAA basketball games from three on-line sports books to test the predictions of this model. Betting action depends on television coverage, team quality, and the expected closeness of the contest. Our results support the notion that consumption benefits, not financial gain, motivate gambling. Preferences of bettors appear similar to those of sports fans, suggesting that models of gamblers as wealth-maximizing investors may not explain observed betting behavior.",

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AB - The utility of gambling model posits that consumption benefits lead rational agents to gamble when faced with negative expected financial returns. We analyze the determinants of bet volume and dollars bet on NCAA basketball games from three on-line sports books to test the predictions of this model. Betting action depends on television coverage, team quality, and the expected closeness of the contest. Our results support the notion that consumption benefits, not financial gain, motivate gambling. Preferences of bettors appear similar to those of sports fans, suggesting that models of gamblers as wealth-maximizing investors may not explain observed betting behavior.

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KW - Consumption value

KW - Dollars bet

KW - Gambling

KW - Sports betting

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Consumption benefits and gambling: Evidence from the NCAA basketball betting market

Abstract

Keywords

ASJC Scopus subject areas

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