Examining the impact of visibility on market efficiency: lessons from movement in NFL betting lines

Kevin Krieger () and Justin Davis
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Kevin Krieger: University of West Florida
Justin Davis: University of West Florida

Journal of Economics and Finance, 2024, vol. 48, issue 2, No 1, 263-279

Abstract: Abstract In general, financial markets of limited attention or visibility are expected to exhibit more inefficient asset prices. Such markets thus require eventual, increased trading to resolve these inefficiencies. In this study, we consider this financial framework within the sports gambling market for National Football League (NFL) games. We consider whether NFL games garnering less public attention are more likely to see larger movements in their betting lines. We consider games with smaller television audiences, with kickoff times shared with other contests, and between teams with smaller fanbases, to be indicative of less visibility. To test our model, we collected betting line data for all regular and postseason NFL football games from 2007–2021. Based on a sample of 3,756 games, our findings indicate more frequent and larger line movements in games with indications of less widespread attention, and many of these results are statistically significant. Our conjecture is that such differences in line movement levels may derive from the limited resources of oddsmakers being disproportionately focused on games with the most visibility.

Keywords: Market efficiency; National Football League; NFL; Market visibility; Sports betting (search for similar items in EconPapers)
JEL-codes: G40 G41 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12197-023-09656-5

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