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Efficiency in the madness? examining the betting market for the ncaa men’s basketball tournament

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  • Daniel C. Hickman

    (University of Idaho)

Abstract

The NCAA men’s basketball tournament is one of the most popular sporting events in the world and gives rise to a substantial betting market. This study uses data from 1996 to 2019 to examine efficiency in this market and to analyze whether bettors display any significant biases with respect to tournament seeding or conference affiliation of participants. The results indicate the market operates at an efficient level, with very little in the way of detectable bias based on seeding. The most noticeable anomaly is a tendency for teams from the Atlantic Coast Conference (ACC) to cover the spread less than would be expected in an efficient market, particularly in the opening round.

Suggested Citation

  • Daniel C. Hickman, 2020. "Efficiency in the madness? examining the betting market for the ncaa men’s basketball tournament," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(3), pages 611-626, July.
    • Handle: RePEc:spr:jecfin:v:44:y:2020:i:3:d:10.1007_s12197-020-09507-7
    DOI: 10.1007/s12197-020-09507-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Market efficiency; NCAA basketball; Gambling; Betting markets;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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