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

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

Research output: Contribution to journalArticle

16 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 languageEnglish (US)
Pages (from-to)376-386
Number of pages11
JournalJournal of Economic Psychology
Volume39
DOIs
StatePublished - Dec 1 2013
Externally publishedYes

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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