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“Hot Hand” in the National Basketball Association Point Spread Betting Market: A 34-Year Analysis

Author

Listed:
  • Benjamin Waggoner

    () (School of Kinesiology, Louisiana State University, Baton Rouge, LA 70803, USA)

  • Daniel Wines

    () (School of Kinesiology, Louisiana State University, Baton Rouge, LA 70803, USA)

  • Brian P. Soebbing

    () (School of Kinesiology, Louisiana State University, Baton Rouge, LA 70803, USA)

  • Chad S. Seifried

    () (School of Kinesiology, Louisiana State University, Baton Rouge, LA 70803, USA)

  • Jean Michael Martinez

    () (School of Kinesiology, Louisiana State University, Baton Rouge, LA 70803, USA)

Abstract

Several articles have looked at factors that affect the adjustments of point spreads, based on hot hands or streaks, for smaller durations of time. This study examines these effects for 34 regular seasons in the National Basketball Association (NBA). Estimating a Seemingly Unrelated Regression model using all 34 seasons, all streaks significantly impacted point spreads and difference in actual points. When estimating each season individually, differences emerged particularly examining winning and losing streaks of six games or more. The results indicate both the presence of momentum effects and the gambler’s fallacy.

Suggested Citation

  • Benjamin Waggoner & Daniel Wines & Brian P. Soebbing & Chad S. Seifried & Jean Michael Martinez, 2014. "“Hot Hand” in the National Basketball Association Point Spread Betting Market: A 34-Year Analysis," International Journal of Financial Studies, MDPI, Open Access Journal, vol. 2(4), pages 1-12, November.
  • Handle: RePEc:gam:jijfss:v:2:y:2014:i:4:p:359-370:d:42745
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    References listed on IDEAS

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    Cited by:

    1. Igan, Deniz & Pinheiro, Marcelo & Smith, John, 2015. "A study of a market anomaly: “White Men Can’t Jump”, but would you bet on it?," Journal of Economic Behavior & Organization, Elsevier, vol. 113(C), pages 13-25.

    More about this item

    Keywords

    basketball; hot hand; streak; point spread; NBA (National Basketball Association);

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance
    • F2 - International Economics - - International Factor Movements and International Business
    • F3 - International Economics - - International Finance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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