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Sentiment Bias and Asset Prices: Evidence from Sports Betting Markets and Social Media

Arne Feddersen (), Brad Humphreys and Brian Soebbing ()

No 13-07, Working Papers from Department of Economics, West Virginia University

Abstract: Previous research using attendance-based proxies for the number of investors with sentiment bias supported the presence of investor sentiment in sports betting markets. We use data from social media (Facebook \Likes") to proxy for participants with investor sentiment and analyze variation in prices set by bookmakers for evidence of influence from investor sentiment. Based on prices and outcomes over two seasons in seven professional sports leagues in Europe and North America, we develop new evidence that asset prices reflect the presence of investor sentiment in these markets, or that bookmakers believe they exist, by offering favorable betting lines for popular teams. Favorable prices do not translate into a higher probability of winning a bet.

Keywords: investor sentiment; sports betting; social media (search for similar items in EconPapers)
JEL-codes: L81 G14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-spo
Date: 2013-09
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Related works:
Journal Article: SENTIMENT BIAS AND ASSET PRICES: EVIDENCE FROM SPORTS BETTING MARKETS AND SOCIAL MEDIA (2017) Downloads
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