Abstract
Sportsbook behavior is tested for NCAA basketball using actual sportsbook betting percentages from on-line sportsbooks. The balanced book hypothesis of thetraditional sportsbook models does not appear to hold, as favorites attract more than 50% of the bets. Although there is some slight evidence toward shading theline in these directions, there is also not overwhelming evidence of the Levitt (2004)hypothesis, as sportsbooks do not appear to be actively pricing to maximize profits. In general, the results seem more consistent with the sportsbook pricing as a forecast, content with earning their commission on losing bets as simple strategies win about 50% of the time.
Recommended Citation
Paul, Rodney J.; Weinbach, Andrew P.; and Paul, Kristin K.
(2012)
"The NCAA Basketball Betting Market: Tests of the Balanced Book and Levitt Hypotheses,"
Journal of Business, Industry, and Economics: Vol. 17, Article 10.
Available at:
https://roar.una.edu/jobie/vol17/iss1/10