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The Belief in the "Hot Hand" in the NFL: Evidence from Betting Volume Data

Author

Listed:
  • Paul, Rodney

    (Syracuse University)

  • Weinbach, Andrew

    (Coastal Carolina University)

  • Humphreys, Brad

    (University of Alberta, Department of Economics)

Abstract

Evidence of bettors’ belief in the “Hot Hand” -- bettors believing teams on winning streaks will continue winning -- exists in the NBA but not the NFL. Previous research assumed that book makers set point spreads to balance betting on games. Recent research shows imbalanced betting in most markets, suggesting the point spreads may not reflect behavioral biases like the “hot hand.” We find a significant increase in bets on teams on winning streaks, suggesting that belief in the “hot hand” in the NFL exists, although simple strategies of betting against teams on a winning streak does not lead to excess returns.

Suggested Citation

  • Paul, Rodney & Weinbach, Andrew & Humphreys, Brad, 2011. "The Belief in the "Hot Hand" in the NFL: Evidence from Betting Volume Data," Working Papers 2011-16, University of Alberta, Department of Economics.
    • Handle: RePEc:ris:albaec:2011_016
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    File URL: https://sites.ualberta.ca/~econwps/2011/wp2011-16.pdf
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    More about this item

    Keywords

    hot hand; sports betting; behavioral bias;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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