Journal of Economics and Finance

, Volume 29, Issue 3, pp 403–408 | Cite as

Market efficiency and NCAA college basketball gambling

Abstract

The betting market for NCAA college basketball is examined from the 1996–97 season through 2003–04. In the overall sample, market efficiency cannot be rejected. For big favorites, specifically those favorites of 20 or more, a simple strategy of betting the underdog in these games is shown to reject the null hypothesis of a fair bet since the underdog wins more than implied by efficiency. This bias appears to be the same as in other sports. The home-team bias in college basketball is shown to be the opposite of the other sports, however, since big favorites win more often than implied by efficiency. Potential reasons for this bias such as NCAA tournament incentives and uniformity of playing conditions are discussed.

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Copyright information

© Springer 2005

Authors and Affiliations

  1. 1.School of BusinessSt. Bonaventure UniversitySt. Bonaventure
  2. 2.Department of EconomicsArmstrong Atlantic State UniversitySavannah

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