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Identifying Investor Sentiment from Price Paths: The Case of Football Betting*
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Abstract(back to top)
We examine the hypothesis that sentimental bettors can affect the path of prices in football betting markets. We hypothesize that sentimental traders follow the advice of false experts, believe excessively in momentum strategies, bet excessively on teams that are well known and covered in the media. We generate proxies for these sources of sentiment and show that point spreads move predictably over the course of the week, partially in response to variables known prior to the opening of betting. We show that a betting strategy of betting against the predicted movement in the point spread is borderline profitable.
Bibliographic Information(back to top)
- Identifying Investor Sentiment from Price Paths: The Case of Football Betting
- Christopher Avery and Judith Chevalier
- The Journal of Business
- Vol. 72, No. 4 (October 1999) (pp. 493-521)
Notes and References(back to top)
This item contains 1 note(s).
Notes
* We are grateful for comments and advice from Suzanne Cooper, Kathryn Dominguez, Glenn Ellison, David Laibson, Steve Levitt, Andrew Metrick, Anne Piehl, Adam Riess, Doug Staiger, Dick Thaler, Richard Zeckhauser, two anonymous referees, and seminar participants at Harvard University, Massachusetts Institute of Technology, Purdue University, and Texas A&M University. We are also grateful for helpful discussions with Kevin Sullivan of Boyd Gaming and Joe Lupo of the Stardust Casino. Avery is also very grateful to the Cowles Foundation at Yale for hospitality and support while this work was being completed. Chevalier acknowledges support from the Alfred P. Sloan Foundation and the Robert P. Reuss faculty research fund at the University of Chicago Graduate School of Business.
Items Citing this Item (back to top)
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