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A comment on Paul and Weinbach’s (2005) “Bettor preferences and efficient markets in totals markets”

Author

Listed:
  • James Francisco

    (AUM College of Public Policy and Justice)

  • Evan Moore

    (AUM College of Public Policy and Justice)

Abstract

Paul and Weinbach (J Econ Financ 29:409–415, 2005) tested the Efficient Market Hypothesis (EMH) in college and arena football betting markets. The authors found that the totals markets were not efficient, with the “over” bet overvalued, but suggested the likelihood that this would change over time as bettors incorporated more information. In this paper, we find, based on a more recent NCAA college football dataset, that the market has largely corrected itself. The totals market in major college football over the period of 2003–2015 shows an efficient market in that neither a naïve strategy of betting “over” nor “under” is profitable.

Suggested Citation

  • James Francisco & Evan Moore, 2018. "A comment on Paul and Weinbach’s (2005) “Bettor preferences and efficient markets in totals markets”," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 42(4), pages 836-840, October.
    • Handle: RePEc:spr:jecfin:v:42:y:2018:i:4:d:10.1007_s12197-018-9437-y
    DOI: 10.1007/s12197-018-9437-y
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    References listed on IDEAS

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    1. Rodney Paul & Andrew Weinbach, 2005. "Bettor preferences and market efficiency in football totals markets," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 29(3), pages 409-415, September.
    2. Gandar, John, et al, 1988. " Testing Rationality in the Point Spread Betting Market," Journal of Finance, American Finance Association, vol. 43(4), pages 995-1008, September.
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    Cited by:

    1. Robert Arscott, 2023. "Market Efficiency and Censoring Bias in College Football Gambling," Journal of Sports Economics, , vol. 24(5), pages 664-689, June.
    2. James Francisco & Evan Moore, 2019. "Betting with house money: reverse line movement based strategies in college football totals markets," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 43(4), pages 813-827, October.

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    More about this item

    Keywords

    College football; Financial markets; Gambling; Recreation;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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