Consumption benefits and gambling: Evidence from the NCAA basketball betting market
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven D. Levitt, 2004. "Why are gambling markets organised so differently from financial markets?," Economic Journal, Royal Economic Society, vol. 114(495), pages 223-246, 04.
- Alok Kumar, 2009. "Who Gambles in the Stock Market?," Journal of Finance, American Finance Association, vol. 64(4), pages 1889-1933, 08.
- Lyn D. Pankoff, 1968. "Market Efficiency and Football Betting," The Journal of Business, University of Chicago Press, vol. 41, pages 203-203.
- van Winden, Frans & Krawczyk, Michal & Hopfensitz, Astrid, 2011.
"Investment, resolution of risk, and the role of affect,"
Journal of Economic Psychology,
Elsevier, vol. 32(6), pages 918-939.
- Frans Van Winden & Michal Krawczyk & Astrid Hopfensitz, 2010. "Investment, Resolution of Risk, and the Role of Affect," CESifo Working Paper Series 2975, CESifo Group Munich.
- Hopfensitz, Astrid & Krawczyk, Michal & Van Winden, Frans, 2009. "Investment, Resolution of Risk, and the Role of Affect," TSE Working Papers 09-123, Toulouse School of Economics (TSE).
- Hopfensitz, Astrid & Krawczyk, Michal & van Winden, Frans A.A.M., 2008. "Investment, Resolution of Risk, and the Role of Affect," CEPR Discussion Papers 6822, C.E.P.R. Discussion Papers.
- Frans van Winden & Michal Krawczyk & Astrid Hopfensitz, 2008. "Investment, Resolution of Risk, and the Role of Affect," Tinbergen Institute Discussion Papers 08-047/1, Tinbergen Institute.
- Margarida Abreu & Victor Mendes, 2011.
"Information, Overconfidence and Trading: Do the Sources of Information Matter?,"
Working Papers Department of Economics
2011/25, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Abreu, Margarida & Mendes, Victor, 2012. "Information, overconfidence and trading: Do the sources of information matter?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 868-881.
- Men-Andri Benz & Leif Brandes & Egon Franck, 2009.
"Do Soccer Associations Really Spend On A Good Thing? Empirical Evidence On Heterogeneity In The Consumer Response To Match Uncertainty Of Outcome,"
Contemporary Economic Policy,
Western Economic Association International, vol. 27(2), pages 216-235, 04.
- Men-Andri Benz & Leif Brandes & Egon Franck, 2006. "Do Soccer Associations Really Spend on a Good Thing? Empirical Evidence on Heterogeneity in the Consumer Response to Match Uncertainty of Outcome," Working Papers 0048, University of Zurich, Institute for Strategy and Business Economics (ISU), revised 2008.
- Men-Andri Benz & Leif Brandes & Egon Franck, 2006. "Do Soccer Associations Really Spend on a Good Thing? Empirical Evidence on Heterogeneity in the Consumer Response to Match Uncertainty of Outcome," Working Papers 0009, University of Zurich, Center for Research in Sports Administration (CRSA), revised 2008.
- Raymond D. Sauer, 1998. "The Economics of Wagering Markets," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2021-2064, December.
- Rodney J. Paul & Andrew P. Weinbach, 2007. "Does Sportsbook.com Set Pointspreads to Maximize Profits? Tests of the Levitt Model of Sportsbook Behavior," Journal of Prediction Markets, University of Buckingham Press, vol. 1(3), pages 209-218, December.
- David Forrest & Robert Simmons & Neil Chesters, 2002. "Buying a Dream: Alternative Models of Demand for Lotto," Economic Inquiry, Western Economic Association International, vol. 40(3), pages 485-496, July.
- Fellner, Gerlinde & Maciejovsky, Boris, 2007.
"Risk attitude and market behavior: Evidence from experimental asset markets,"
Journal of Economic Psychology,
Elsevier, vol. 28(3), pages 338-350, June.
- Gerlinde Fellner & Boris Maciejovsky, "undated". "Risk Attitude and Market Behavior: Evidence from Experimental Asset Markets," Papers on Strategic Interaction 2002-34, Max Planck Institute of Economics, Strategic Interaction Group.
- Rodney Paul & Andrew Weinbach & J. Weinbach, 2003. "Fair bets and profitability in college football gambling," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 27(2), pages 236-242, June.
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-291, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56, pages 279-279.
- Sauer, Raymond D, et al, 1988. "Hold Your Bets: Another Look at the Efficiency of the Gambling Market for National Football League Games: Comment," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 206-213, February.
- Rodney J. Paul & Andrew P. Weinbach, 2009. "Sportsbook Behavior in the NCAA Football Betting Market: Tests of the Traditional and Levitt Models of Sportsbook Behavior," Journal of Prediction Markets, University of Buckingham Press, vol. 3(2), pages 21-37, August.
- Rodney J. Paul & Andrew P. Weinbach, 2008. "Price Setting in the NBA Gambling Market: Tests of the Levitt Model of Sportsbook Behavior," International Journal of Sport Finance, Fitness Information Technology, vol. 3(3), pages 137-145, August.
- Rodney J. Paul & Andrew P. Weinbach, 2010. "The Determinants of Betting Volume for Sports in North America: Evidence of Sports Betting as Consumption in the NBA and NHL," International Journal of Sport Finance, Fitness Information Technology, vol. 5(2), pages 128-140, May.
- Paul, Rodney J. & Weinbach, Andrew P., 2007. "The uncertainty of outcome and scoring effects on Nielsen ratings for Monday Night Football," Journal of Economics and Business, Elsevier, vol. 59(3), pages 199-211.
- Conlisk, John, 1993. "The Utility of Gambling," Journal of Risk and Uncertainty, Springer, vol. 6(3), pages 255-275, June.
- Nicholas Barberis, 2012. "A Model of Casino Gambling," Management Science, INFORMS, vol. 58(1), pages 35-51, January.
When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:39:y:2013:i:c:p:376-386. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.