Racial Bias in the NBA: Implications in Betting Markets
نویسنده
چکیده
Recent studies have documented the existence of an own-race bias on the part of sports officials. In this paper we explore the implications of these biases on betting markets. We use data from the 1991/92 2004/05 NBA regular seasons to show that a betting strategy exploiting ownrace biases by referees would systematically beat the spread.
منابع مشابه
Rational Mispricing and Irrational Mispricing in Betting Markets: Implications for Market Effi ciency Tests∗
Testing market effi ciency in betting markets does not necessarily get around the joint hypothesis problem because the result depends on the assumed role of bookmakers. In a simple model of monopolistic competition, bookmakers’ rational pricing induces the Favorite-Longshot Bias even without bettors’irrationality (Rational Mispricing) and accommodates bettors’irrational beliefs to exploit betti...
متن کاملLoss aversion and mental accounting: The favorite-longshot bias in parimutuel betting
In this paper it is shown that the combination of mental accounting and loss aversion can fundamentally changes people’s way of evaluating risky alternatives. The observation is applied in a market setting: Parimutuel betting markets. In parimutuel betting markets it has been found that for horses with lowest odds (favorites), market estimates of winning probabilities are smaller than objective...
متن کاملPartition-dependent Framing Effects in Lab and Field Prediction Markets*
Many psychology experiments show that individually judged probabilities of the same event can vary depending on the partition of the state space (a framing effect called "partitiondependence"). We show that these biases transfer to competitive prediction markets in which multiple informed traders are provided economic incentives to bet on their beliefs about events. We report results of a short...
متن کاملPay Discrimination, Exit Discrimination or Both? Another Look at an Old Issue Using NBA Data
Economic literature has identified two potential types of racial discrimination in sports careers: exit discrimination and wage discrimination. The authors test for both types of discrimination in National Basketball Association (NBA) data in two ways. First using a modified Heckman procedure, they control for potential survival bias that may arise from exit discrimination in panel data and cou...
متن کاملComplexity as a Guide to Understanding Decision Bias: A Contribution to the Favorite-Longshot Bias Debatey
This paper investigates the origins of a widespread decision bias in betting markets, the favorite-longshot bias (FLB); in particular, whether it is caused by cognitive errors on the part of bettors or by the pricing policies of bookmakers. The methodology is based on previous literature, which has suggested that: (i) races, as decision tasks for bettors, can be distinguished by their degree of...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2010