Basketball Market Efficiency and the Big Dog Bias

Ladd Kochman and Randy Goodwin

New York Economic Review, 2012, vol. 43, issue 1, 70-74

Abstract: A betting rule is devised to profit from an alleged unwillingness of strong favorites in the National Basketball Association to cover large point spreads. Imaginary wagers placed on NBA underdogs awarded 10+ points by Las Vegas oddsmakers produced a significantly nonrandom wins-to-bets ratio of 53.4 percent during the five consecutive seasons ending in 2007. The failure to generate a W/B ratio of at least 55.4 percent over the 758 games meeting our point spread constraint precludes any claim of profitability.

Date: 2012
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