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Consumption Benefits and Gambling: Evidence From the NCAA Basketball Betting Market

The determinants of the total number of bets placed on games from three on-line sports books are analyzed for the 2008‐9 NCAA basketball season. Betting volume depends on television coverage, temporal factors, the quality of the teams, and the expected closeness of the contest. Our results support the notion that consumption benefits motivate gambling rather than financial gain. Preferences of bettors appear similar to those of sports fans, suggesting that modeling gamblers as wealth‐maximizing investors may not be appropriate, and supports the predictions of the model of gambling developed by Conlisk (1993).

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File URL: http://www.economics.ualberta.ca/~/media/economics/FacultyAndStaff/WPs/WP2010-07-Humphreys.pdf
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Paper provided by University of Alberta, Department of Economics in its series Working Papers with number 2010-7.

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Length: 20 pages
Date of creation: 01 Mar 2010
Date of revision:
Handle: RePEc:ris:albaec:2010_007
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  1. Hopfensitz, Astrid & Krawczyk, Michal & Van Winden, Frans, 2009. "Investment, Resolution of Risk, and the Role of Affect," TSE Working Papers 09-123, Toulouse School of Economics (TSE).
  2. Rodney J. Paul & Andrew P. Weinbach, 2009. "Sportsbook Behavior in the NCAA Football Betting Market: Tests of the Traditional and Levitt Models of Sportsbook Behavior," Journal of Prediction Markets, University of Buckingham Press, vol. 3(2), pages 21-37, August.
  3. Conlisk, John, 1993. " The Utility of Gambling," Journal of Risk and Uncertainty, Springer, vol. 6(3), pages 255-75, June.
  4. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  5. Alok Kumar, 2009. "Who Gambles in the Stock Market?," Journal of Finance, American Finance Association, vol. 64(4), pages 1889-1933, 08.
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  7. Margarida Abreu & Victor Mendes, 2011. "Information, Overconfidence and Trading: Do the Sources of Information Matter?," Working Papers Department of Economics 2011/25, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  8. Nicholas Barberis, 2012. "A Model of Casino Gambling," Management Science, INFORMS, vol. 58(1), pages 35-51, January.
  9. Lyn D. Pankoff, 1968. "Market Efficiency and Football Betting," The Journal of Business, University of Chicago Press, vol. 41, pages 203.
  10. Rodney J. Paul & Andrew P. Weinbach, 2007. "Does Sportsbook.com Set Pointspreads to Maximize Profits? Tests of the Levitt Model of Sportsbook Behavior," Journal of Prediction Markets, University of Buckingham Press, vol. 1(3), pages 209-218, December.
  11. Raymond D. Sauer, 1998. "The Economics of Wagering Markets," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2021-2064, December.
  12. Steven D. Levitt, 2004. "Why are gambling markets organised so differently from financial markets?," Economic Journal, Royal Economic Society, vol. 114(495), pages 223-246, 04.
  13. Rodney J. Paul & Andrew P. Weinbach, 2010. "The Determinants of Betting Volume for Sports in North America: Evidence of Sports Betting as Consumption in the NBA and NHL," International Journal of Sport Finance, Fitness Information Technology, vol. 5(2), pages 128-140, May.
  14. David Forrest & Robert Simmons & Neil Chesters, 2002. "Buying a Dream: Alternative Models of Demand for Lotto," Economic Inquiry, Western Economic Association International, vol. 40(3), pages 485-496, July.
  15. Gerlinde Fellner & Boris Maciejovsky, . "Risk Attitude and Market Behavior: Evidence from Experimental Asset Markets," Papers on Strategic Interaction 2002-34, Max Planck Institute of Economics, Strategic Interaction Group.
  16. Rodney J. Paul & Andrew P. Weinbach, 2008. "Price Setting in the NBA Gambling Market: Tests of the Levitt Model of Sportsbook Behavior," International Journal of Sport Finance, Fitness Information Technology, vol. 3(3), pages 137-145, August.
  17. Rodney Paul & Andrew Weinbach & J. Weinbach, 2003. "Fair bets and profitability in college football gambling," Journal of Economics and Finance, Springer, vol. 27(2), pages 236-242, June.
  18. Sauer, Raymond D, et al, 1988. "Hold Your Bets: Another Look at the Efficiency of the Gambling Market for National Football League Games: Comment," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 206-13, February.
  19. Paul, Rodney J. & Weinbach, Andrew P., 2007. "The uncertainty of outcome and scoring effects on Nielsen ratings for Monday Night Football," Journal of Economics and Business, Elsevier, vol. 59(3), pages 199-211.
  20. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56, pages 279.
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