Market efficiency and NCAA college basketball gambling

Rodney Paul, Andrew Weinbach

Research output: Contribution to journalArticle

15 Scopus citations

Abstract

The betting market for NCAA college basketball is examined from the 1996-97 season through 2003-04. In the overall sample, market efficiency cannot be rejected. For big favorites, specifically those favorites of 20 or more, a simple strategy of betting the underdog in these games is shown to reject the null hypothesis of a fair bet since the underdog wins more than implied by efficiency. This bias appears to be the same as in other sports. The home-team bias in college basketball is shown to be the opposite of the other sports, however, since big favorites win more often than implied by efficiency. Potential reasons for this bias such as NCAA tournament incentives and uniformity of playing conditions are discussed.

Original languageEnglish (US)
Pages (from-to)403-408
Number of pages6
JournalJournal of Economics and Finance
Volume29
Issue number3
DOIs
StatePublished - Jan 1 2005
Externally publishedYes

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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