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Bettor Belief in the “Hot Handâ€

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  • Rodney J. Paul
  • Andrew P. Weinbach
  • Brad Humphreys

Abstract

The “Hot Hand†hypothesis in gambling markets—belief that teams on winning streaks will continue winning—appears to exist in the National Basketball Association (NBA), but not the National Football League (NFL). Past research assumed that bookmakers set point spreads to balance betting volume on games. Recent research shows persistent imbalanced betting in most betting markets, suggesting point spreads may not fully reflect bettor preferences. We find significant increases in bets on teams on winning streaks against the spread in the NFL, suggesting that perceived “hot hand†effects exist in betting on NFL games. Betting with or against streaks does not earn profits for bettors.

Suggested Citation

  • Rodney J. Paul & Andrew P. Weinbach & Brad Humphreys, 2014. "Bettor Belief in the “Hot Handâ€," Journal of Sports Economics, , vol. 15(6), pages 636-649, December.
    • Handle: RePEc:sae:jospec:v:15:y:2014:i:6:p:636-649
    DOI: 10.1177/1527002512465414
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    References listed on IDEAS

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    Cited by:

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    4. Mills, Brian M. & Salaga, Steven, 2018. "A natural experiment for efficient markets: Information quality and influential agents," Journal of Financial Markets, Elsevier, vol. 40(C), pages 23-39.
    5. Steven Salaga & Katie M Brown, 2018. "Momentum and betting market perceptions of momentum in college football," Applied Economics Letters, Taylor & Francis Journals, vol. 25(19), pages 1383-1388, November.
    6. Marius Ötting & Christian Deutscher & Carl Singleton & Luca De Angelis, 2022. "Gambling on Momentum," Economics Discussion Papers em-dp2022-10, Department of Economics, University of Reading.
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    8. Marius Ötting & Christian Deutscher & Carl Singleton & Luca De Angelis, 2023. "Gambling on Momentum in Contests," Economics Discussion Papers em-dp2023-08, Department of Economics, University of Reading.

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