In search of the source of informed trader information in the college football betting market
The movement between the opening and closing of betting lines on sports events has been shown to contain valuable information. The purpose of this study is to search for the source of this valuable information. Changes in college football betting lines are examined with respect to information from the widely disseminated Dunkel Index, the Associated Press Writers' Poll, and lagged performance variables. It is found that bettors use this information to bet but that this information is not significant to betting outcomes, which indicates noise trading. Most importantly, it is shown that the unexplained betting line movements are most important in explaining final game outcomes. This result leads to the conclusion that informed bettors are using private information.
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Volume (Year): 15 (2005)
Issue (Month): 3 ()
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Avery, Christopher & Chevalier, Judith, 1999. "Identifying Investor Sentiment from Price Paths: The Case of Football Betting," The Journal of Business, University of Chicago Press, vol. 72(4), pages 493-521, October.
- Dare, William H. & MacDonald, S. Scott, 1996. "A generalized model for testing the home and favorite team advantage in point spread markets," Journal of Financial Economics, Elsevier, vol. 40(2), pages 295-318, February.
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