A study of a market anomaly: “White Men Can’t Jump”, but would you bet on it?

Deniz Igan, Marcelo Pinheiro and John Smith

Journal of Economic Behavior & Organization, 2015, vol. 113, issue C, 13-25

Abstract: We identify a largely efficient market in which there is a relationship between race and market outcomes. Examining data on NBA games, we find that teams with more black players tend to face larger point spreads and that these teams perform worse against the spread. These biased outcomes are significantly large and persistent so that we are able to identify profit opportunities. We also find evidence that the biased spread is set by the bookmakers rather than being moved as a result of excessive betting on the more black team. We examine several alternate explanations, and the racial composition measures remain significant in these specifications.

Keywords: Market efficiency; Racial groups; Mistaken beliefs; Market anomalies (search for similar items in EconPapers)
JEL-codes: D03 G00 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:113:y:2015:i:c:p:13-25

DOI: 10.1016/j.jebo.2015.02.005

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