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The Search for Informed Traders in the Totals Betting Market for National Basketball Association Games

Author

Listed:
  • John M. Gandar

    (University of North Carolina at Charlotte)

  • Richard A. Zuber

    (University of North Carolina at Charlotte)

  • William H. Dare

    (Oklahoma State University)

Abstract

A recent article on line changes in the point spread betting market for National Basketball Association games found evidence that trading incorporates information into price. This article examines a closely related but previously unexamined betting market—the betting market for the total points scored in a game. The authors find that closing totals lines are more accurate forecasts of total points scored than are opening totals lines. It is shown that line changes move betting lines in the correct direction and by the appropriate magnitude to eliminate biases in opening totals lines. Line changes in this betting market, like those in the point spread betting market, cause prices to more accurately reflect fundamental values.

Suggested Citation

  • John M. Gandar & Richard A. Zuber & William H. Dare, 2000. "The Search for Informed Traders in the Totals Betting Market for National Basketball Association Games," Journal of Sports Economics, , vol. 1(2), pages 177-186, May.
    • Handle: RePEc:sae:jospec:v:1:y:2000:i:2:p:177-186
    DOI: 10.1177/152700250000100205
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    References listed on IDEAS

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    Cited by:

    1. Tai, Chung-Ching & Lin, Hung-Wen & Chie, Bin-Tzong & Tung, Chen-Yuan, 2019. "Predicting the failures of prediction markets: A procedure of decision making using classification models," International Journal of Forecasting, Elsevier, vol. 35(1), pages 297-312.
    2. Kevin Krieger & Clay Girdner & Andy Fodor & David Kirch, 2013. "The Power Of Wagering On Power Conferences," Journal of Prediction Markets, University of Buckingham Press, vol. 7(1), pages 13-26.
    3. Stekler, H.O. & Sendor, David & Verlander, Richard, 2010. "Issues in sports forecasting," International Journal of Forecasting, Elsevier, vol. 26(3), pages 606-621, July.
      • Herman O. Stekler & David Sendor & Richard Verlander, 2009. "Issues in Sports Forecasting," Working Papers 2009-002, The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting.
    4. Berkowitz, Jason P. & Depken, Craig A. & Gandar, John M., 2015. "Information and accuracy in pricing: Evidence from the NCAA men׳s basketball betting market," Journal of Financial Markets, Elsevier, vol. 25(C), pages 16-32.
    5. 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.
    6. Jeremy Sandford & Paul Shea, 2013. "Optimal Setting of Point Spreads," Economica, London School of Economics and Political Science, vol. 80(317), pages 149-170, January.
    7. R. Alan Bowman & James Lambrinos & Thomas Ashman, 2013. "Competitive Balance in the Eyes of the Sports Fan," Journal of Sports Economics, , vol. 14(5), pages 498-520, October.
    8. Rodney J. Paul & Andrew P. Weinbach, 2008. "Line Movements and Market Timing in the Baseball Gambling Market," Journal of Sports Economics, , vol. 9(4), pages 371-386, August.
    9. Richard Borghesi, 2008. "Weather biases in the NFL totals market," Applied Financial Economics, Taylor & Francis Journals, vol. 18(12), pages 947-953.
    10. Štrumbelj, Erik & Vračar, Petar, 2012. "Simulating a basketball match with a homogeneous Markov model and forecasting the outcome," International Journal of Forecasting, Elsevier, vol. 28(2), pages 532-542.
    11. Baryla Jr., Edward A. & Borghesi, Richard A. & Dare, William H. & Dennis, Steven A., 2007. "Learning, price formation and the early season bias in the NBA," Finance Research Letters, Elsevier, vol. 4(3), pages 155-164, September.
    12. Frank Daumann & Markus Breuer, 2011. "The Role of Information in Professional Football and the German Football Betting Market," Chapters, in: Wladimir Andreff (ed.), Contemporary Issues in Sports Economics, chapter 6, Edward Elgar Publishing.

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