Sentiment Bias in National Basketball Association Betting

Authors

Arne Feddersen, University of Southern DenmarkFollow
Brad R. Humphreys, West Virginia UniversityFollow
Brian P. Soebbing, Louisiana State UniversityFollow

Document Type

Working Paper

Publication Date

Fall 9-2013

College/Unit

Chambers College of Business and Economics

Document Number

13-03

Department/Program/Center

Economics

Abstract

We develop evidence of bettors with sentiment bias in the betting market on National Basketball Association (NBA) games. We use novel measures of team popularity, arena capacity-utilization and team all star votes received, as proxies for the presence of biased investors. Analysis of point spreads and bet outcomes for more than 33,000 NBA games played in 1981-2012 shows that bookmakers oer favorable point spreads on games involving popular teams, an outcome consistent with sentiment bias. These favorable point spreads do not translate into higher returns for informed bettors, suggesting that bookmakers shade point spreads to increase their profits.

Digital Commons Citation

Feddersen, Arne; Humphreys, Brad R.; and Soebbing, Brian P., "Sentiment Bias in National Basketball Association Betting" (2013). Economics Faculty Working Papers Series. 83.
https://researchrepository.wvu.edu/econ_working-papers/83