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Do Gamblers Think That Teams Tank? Evidence from the NBA

Author

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  • Soebbing, Brian

    (University of Alberta, Physical Education and Recreation)

  • Humphreys, Brad

    () (University of Alberta, Department of Economics)

Abstract

A growing body of literature indicates that sports teams face incentives to lose games at the end of the season. This incentive arises from league entry draft policy. We use data from betting markets to confirm the existence of tanking, or the perception of tanking, in the NBA. Results from a SUR model of point spreads and point differences in NBA games indicate that betting markets believe that tanking takes place in the NBA, even though the evidence that tanking actually exists is mixed. NBA policy changes also affect betting market outcomes.

Suggested Citation

  • Soebbing, Brian & Humphreys, Brad, 2010. "Do Gamblers Think That Teams Tank? Evidence from the NBA," Working Papers 2010-13, University of Alberta, Department of Economics.
  • Handle: RePEc:ris:albaec:2010_013
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    File URL: https://sites.ualberta.ca/~econwps/2010/wp2010-13.pdf
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    Cited by:

    1. Colin Green & Fernando Lozano & Rob Simmons, 2015. "Rank-Order Tournaments, Probability of Winning and Investing in Talent: Evidence from Champions' League Qualifying Rules," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232(1), pages 30-40, May.
    2. Brad Humphreys & Candon Johnson, 2017. "The Effect of Superstar Players on Game Attendance: Evidence from the NBA," Working Papers 17-16, Department of Economics, West Virginia University.
    3. repec:sae:jospec:v:19:y:2018:i:4:p:455-472 is not listed on IDEAS
    4. Arne Feddersen & Brad R. Humphreys & Brian P. Soebbing, 2018. "Sentiment Bias in National Basketball Association Betting," Journal of Sports Economics, , vol. 19(4), pages 455-472, May.
    5. Benjamin Waggoner & Daniel Wines & Brian P. Soebbing & Chad S. Seifried & Jean Michael Martinez, 2014. "“Hot Hand” in the National Basketball Association Point Spread Betting Market: A 34-Year Analysis," International Journal of Financial Studies, MDPI, Open Access Journal, vol. 2(4), pages 1-12, November.

    More about this item

    Keywords

    incentives; betting markets; tanking;

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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