Holdover Bias in the College Football Betting Market

Bennett, Randall W.

doi:10.1007/s11293-019-09611-y

Cited by 6 publications

(5 citation statements)

References 21 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In a follow-up study, Bennett (2019) analyzes these sticky preferences in the college football setting. More specifically, he tests whether betting against teams in the top of the Associated Press poll (a prestigious ranking) last season is profitable in the first game of a new season.…”

Section: Strategies Based On Past Performancementioning

confidence: 99%

Efficient Spread Betting Markets: A Literature Review

Vandenbruaene

Ceuster

Annaert

2022

Journal of Sports Economics

View full text Add to dashboard Cite

Are simple trading strategies profitable? It is a question that has been on the minds of academics and practitioners for decades. In this paper, we review the longstanding literature on trading strategies in spread betting (also known as handicap betting), a popular sports betting microstructure. We review over 600 strategy implementations and find that market efficiency and systematic misperceptions are not mutually exclusive per se. Predictable glitches occur, but they are too small to be profitably exploited which is consistent with efficient markets. Furthermore, while controlling for data mining issues is becoming mainstream in finance, it has not yet made its way into this literature. We provide evidence that the hurdle rate of | z| > 3 which has been put forward in the broader finance literature should also be used in betting market research.

show abstract

Section: Strategies Based On Past Performancementioning

confidence: 99%

Efficient Spread Betting Markets: A Literature Review

Vandenbruaene

Ceuster

Annaert

2022

Journal of Sports Economics

View full text Add to dashboard Cite

show abstract

“…However, other research shows that betting lines are less efficient as a predictor earlier in the regular season than later in the season. Bennett (2019) shows betting spread inefficiencies at the beginning of the college season, as bettors could be backward looking and over-rely on previous year information, while Fodor et al (2013) show that NFL teams that qualified for the playoffs are favored by too large a margin the opening weekend of the following season. Betting lines for bowl games could be better predictors of outcome than regular season games (as information from the regular season outcomes translate to bowl games), or the betting lines in bowl games could be less efficient as a predictor (for numerous factors, such as there is typically a larger time span between the end of the regular season college season and a team’s bowl game than regular season games, potential player eligibility, switching semesters, potential less familiarity with opponent, etc).…”

Section: Research Questionsmentioning

confidence: 99%

“…As for how momentum might effect game matchups across P5 and non-P5 teams, Bennett (2019) shows that momentum effects associated with a betting strategy that bets in favor of (against) teams that overperformed (underperformed) the spread the previous week leads to a market inefficiency. Further, Bennett shows that this effect primarily exists for games matching two non-P5 teams and concludes that the lack of efficient information incorporation for these games is the reason for such an inefficiency.…”

Section: Research Questionsmentioning

confidence: 99%

The Predictive Power of College Football Spreads: Regular Season Versus Bowl Games

Cox

Schwartz

Ness

et al. 2020

Journal of Sports Economics

View full text Add to dashboard Cite

This paper compares the predictive accuracy and efficiency of college football point spreads for regular and bowl games. We find that the betting line spread is more accurate as a predictor of the eventual winner for college football games during the regular season than for the bowl games. Although the betting market is mostly efficient with regard to the favorite covering the spread, we do find several inefficiencies in the betting market for regular and bowl games within transaction costs. Specifically, we find the betting market to be an inefficient processor of momentum effects, particularly negative momentum.

show abstract

“…The authors reasoned that losing bettors had clung to perceptions previously formed, which compelled oddsmakers to inflate point spreads to those bettors' disadvantage. Bennett (2019) provided another example of the so-called "holdover bias." He reported that betting against those college teams in the first game of the year that had been ranked in the past season's Associated Press Top 25 poll for the 2008-2016 seasons won at a rate greater than the breakeven mark of 52.4 percent when betting $11-to-win-$10.…”

Section: Introductionmentioning

confidence: 99%

Football Betting and Behavioral Economics: A Note

Kochman¹,

Bray²,

Noiset³

2022

IJEFI

View full text Add to dashboard Cite

The strategy of oddsmakers to alter point spreads that capitalize on bettors’ preference for popular teams not only dooms regular profits for gamblers but also provides a clear example of imperfect decision-making for behavioral economists. The fear of regret suggests that bettors gravitate toward popular teams since any losses would not be peculiar to them. The implication that spreads on popular college teams would be inflated to balance bets and, in turn, create profit opportunities when betting against popular teams proved faulty.

show abstract

Holdover Bias in the College Football Betting Market

Cited by 6 publications

References 21 publications

Efficient Spread Betting Markets: A Literature Review

Efficient Spread Betting Markets: A Literature Review

The Predictive Power of College Football Spreads: Regular Season Versus Bowl Games

Football Betting and Behavioral Economics: A Note

Contact Info

Product

Resources

About