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Player absence and betting lines in the NBA

Author

Listed:
  • Dare, William H.
  • Dennis, Steven A.
  • Paul, Rodney J.

Abstract

We examine the efficiency of betting lines in the NBA when players are absent. We show that the betting line tends to move away from the team with absences, particularly when a meaningful player is absent. We show that opening lines set by bookmakers have significant errors in games when a player is absent. No profitable betting strategy exists in wagering at the closing line, however, as biases are removed by either the sportsbook responding to new information or the sportsbook responding to the actions of bettors.

Suggested Citation

  • Dare, William H. & Dennis, Steven A. & Paul, Rodney J., 2015. "Player absence and betting lines in the NBA," Finance Research Letters, Elsevier, vol. 13(C), pages 130-136.
    • Handle: RePEc:eee:finlet:v:13:y:2015:i:c:p:130-136
    DOI: 10.1016/j.frl.2015.02.004
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    References listed on IDEAS

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    1. repec:bla:jfinan:v:53:y:1998:i:1:p:385-401 is not listed on IDEAS
    2. Sauer, Raymond D & Brajer, Vic & Ferris, Stephen P & Marr, M Wayne, 1988. "Hold Your Bets: Another Look at the Efficiency of the Gambling Market for National Football League Games: Comment," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 206-213, February.
    3. Baryla Jr., Edward A. & Borghesi, Richard A. & Dare, William H. & Dennis, Steven A., 2007. "Learning, price formation and the early season bias in the NBA," Finance Research Letters, Elsevier, vol. 4(3), pages 155-164, September.
    4. Lyn D. Pankoff, 1968. "Market Efficiency and Football Betting," The Journal of Business, University of Chicago Press, vol. 41, pages 203-203.
    5. repec:bla:jfinan:v:43:y:1988:i:4:p:995-1008 is not listed on IDEAS
    6. Steven D. Levitt, 2004. "Why are gambling markets organised so differently from financial markets?," Economic Journal, Royal Economic Society, vol. 114(495), pages 223-246, April.
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    Cited by:

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    2. Maymin, Philip Z., 2019. "Wage against the machine: A generalized deep-learning market test of dataset value," International Journal of Forecasting, Elsevier, vol. 35(2), pages 776-782.

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    More about this item

    Keywords

    Player absence; Bet; Point spread; Line; Efficiency; NBA;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G19 - Financial Economics - - General Financial Markets - - - Other
    • Z00 - Other Special Topics - - General - - - General

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