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Point shaving in NCAA Men’s Basketball: Behavioral finance, scale, and deterrence

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  • Sanders, Shane

Abstract

We examine point-shaving corruption in NCAA Men’s Basketball betting markets, which has persisted despite deterrence policies. We collect data on players indicted or implicated for point-shaving within the last 50 years and find that: (1) the act is significantly more common among senior, or final-year, players and (2) lack of deterrence leverage is an important factor in the representative player’s decision calculus. Lastly, we analyze properties of a potential behavioral finance policy to further deter point-shaving, whereby players receive a grant (athletic scholarship) that retroactively converts into a market-rate student loan given malfeasance. The policy’s deterrence properties are examined theoretically.

Suggested Citation

  • Sanders, Shane, 2022. "Point shaving in NCAA Men’s Basketball: Behavioral finance, scale, and deterrence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    • Handle: RePEc:eee:beexfi:v:34:y:2022:i:c:s2214635022000272
    DOI: 10.1016/j.jbef.2022.100670
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    References listed on IDEAS

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    1. Chang Yang-Ming & Sanders Shane D., 2009. "Corruption on the Court: The Causes and Social Consequences of Point-Shaving in NCAA Basketball," Review of Law & Economics, De Gruyter, vol. 5(1), pages 269-291, May.
    2. Tanjim Hossain & John A. List, 2012. "The Behavioralist Visits the Factory: Increasing Productivity Using Simple Framing Manipulations," Management Science, INFORMS, vol. 58(12), pages 2151-2167, December.
    3. Borghesi, Richard & Dare, William, 2009. "A test of the widespread-point-shaving theory," Finance Research Letters, Elsevier, vol. 6(3), pages 115-121, September.
    4. Richard Borghesi & Rodney J. Paul & Andrew P. Weinbach, 2010. "Totals Markets as Evidence Against Widespread Point Shaving," Journal of Prediction Markets, University of Buckingham Press, vol. 4(2), pages 15-22, September.
    5. Hee Jung Hong & Ian Fraser, 2021. "‘My Sport Won’t Pay the Bills Forever’: High-Performance Athletes’ Need for Financial Literacy and Self-Management," JRFM, MDPI, vol. 14(7), pages 1-16, July.
    6. Babatunde Buraimo & Giuseppe Migali & Robert Simmons, 2016. "An Analysis of Consumer Response to Corruption: Italy's Calciopoli Scandal," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(1), pages 22-41, February.
    7. Ed Dehaan & Frank Hodge & Terry Shevlin, 2013. "Does Voluntary Adoption of a Clawback Provision Improve Financial Reporting Quality?," Contemporary Accounting Research, John Wiley & Sons, vol. 30(3), pages 1027-1062, September.
    8. Justin Wolfers, 2006. "Point Shaving: Corruption in NCAA Basketball," American Economic Review, American Economic Association, vol. 96(2), pages 279-283, May.
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    Cited by:

    1. Shane D. Sanders, 2024. "Wages, Talent, and Demand for NCAA Sport After the Alston v. NCAA Antitrust Case," Journal of Sports Economics, , vol. 25(2), pages 169-185, February.

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