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Information asymmetry in the NFL gambling market: Inside information versus informed bettors

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  • Shank, Corey A.

Abstract

I employ a unique NFL gambling dataset to disentangle information asymmetry between bettors and sportsbooks. In contrast to expectations, I find no evidence that sportsbooks hold more information than the bettors. In fact, the results show that in instances where sportsbooks behave as if they are informed, the market is inefficient and gamblers are earning a profit. One explanation for these results is that gamblers are more informed than the sportsbooks.

Suggested Citation

  • Shank, Corey A., 2022. "Information asymmetry in the NFL gambling market: Inside information versus informed bettors," Journal of Behavioral and Experimental Finance, Elsevier, vol. 36(C).
    • Handle: RePEc:eee:beexfi:v:36:y:2022:i:c:s2214635022000806
    DOI: 10.1016/j.jbef.2022.100758
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    References listed on IDEAS

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    Cited by:

    1. Zhang, Dongyang, 2023. "Can digital finance empowerment reduce extreme ESG hypocrisy resistance to improve green innovation?," Energy Economics, Elsevier, vol. 125(C).
    2. Nofsinger, John R. & Shank, Corey A., 2023. "Momentum trading in the NFL gambling market," Finance Research Letters, Elsevier, vol. 55(PB).

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    More about this item

    Keywords

    Financial markets; Gambling; Information asymmetry; Market efficiency; Sports betting;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G1 - Financial Economics - - General Financial Markets
    • G4 - Financial Economics - - Behavioral Finance
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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