College Football Rankings and Market Efficiency
The results in this paper show that various college football ranking systems have useful independent information for predicting the outcomes of games. Optimal weights for the systems are estimated, and the use of these weights produces a predictive system that is more accurate than any of the individual systems. The results also provide a fairly precise estimate of the size of the home field advantage. These results may be of interest to the Bowl Championship Series in choosing which teams to play in the national championship game. The results also show, however, that none of the systems, including the optimal combination, contains any useful information that is not in the final Las Vegas point spread. It is argued in the paper that this is a fairly strong test of the efficiency of the college football betting market.
|Date of creation:||01 Oct 2002|
|Date of revision:||01 Aug 2007|
|Contact details of provider:|| Web page: http://icf.som.yale.edu/|
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- Lyn D. Pankoff, 1968. "Market Efficiency and Football Betting," The Journal of Business, University of Chicago Press, vol. 41, pages 203.
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- John M. Gandar & William H. Dare & Craig R. Brown & Richard A. Zuber, 1998. "Informed Traders and Price Variations in the Betting Market for Professional Basketball Games," Journal of Finance, American Finance Association, vol. 53(1), pages 385-401, 02.
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