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Anchoring bias in the NFL gambling market

Author

Listed:
  • Fodor, Andy
  • Patterson, Fernando M.
  • Shank, Corey A.

Abstract

We explore the impact of the anchoring bias in the NFL betting market to overcome limitations within the financial literature regarding investor behavior. Consistent with an anchoring bias, we find that bettors prefer to bet on teams with better pre-season Super Bowl odds throughout the entire season. Importantly, we document that there is a significant relationship with profitability and pre-season odds in weeks two through eight of the NFL season, suggesting that sportsbooks do not take advantage of gamblers’ biases. Additionally, we provide evidence that sportsbooks continue to incorporate pre-season odds into their closing lines throughout the entire season, suggesting they may anchor to pre-season odds themselves. Our findings offer novel insights into anchoring behavior with important implications for understanding biases in financial markets.

Suggested Citation

  • Fodor, Andy & Patterson, Fernando M. & Shank, Corey A., 2025. "Anchoring bias in the NFL gambling market," Economics Letters, Elsevier, vol. 250(C).
    • Handle: RePEc:eee:ecolet:v:250:y:2025:i:c:s0165176525001259
    DOI: 10.1016/j.econlet.2025.112288
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    References listed on IDEAS

    as
    1. Tobias J. Moskowitz, 2021. "Asset Pricing and Sports Betting," Journal of Finance, American Finance Association, vol. 76(6), pages 3153-3209, December.
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    3. Shank, Corey A., 2022. "Information asymmetry in the NFL gambling market: Inside information versus informed bettors," Journal of Behavioral and Experimental Finance, Elsevier, vol. 36(C).
    4. Durand, Robert B. & Patterson, Fernando M. & Shank, Corey A., 2021. "Behavioral biases in the NFL gambling market: Overreaction to news and the recency bias," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    5. Li, Fengfei & Lin, Ji-Chai & Lin, Tse-Chun & Shang, Longfei, 2023. "Behavioral bias, distorted stock prices, and stock splits," Journal of Banking & Finance, Elsevier, vol. 154(C).
    6. Nofsinger, John R. & Shank, Corey A., 2023. "Momentum trading in the NFL gambling market," Finance Research Letters, Elsevier, vol. 55(PB).
    7. Joshua D. Pitts & Brent A. Evans, 2020. "Defensive Coordinator and Head Coach Effects on Team Defensive Performance in the National Football League," Journal of Sports Economics, , vol. 21(5), pages 493-524, June.
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    More about this item

    Keywords

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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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