IDEAS home Printed from https://ideas.repec.org/a/jsf/intjsf/v3y2008i3p137-145.html
   My bibliography  Save this article

Price Setting in the NBA Gambling Market: Tests of the Levitt Model of Sportsbook Behavior

Author

Listed:
  • Rodney J. Paul

    (St. Bonaventure University)

  • Andrew P. Weinbach

    (Coastal Carolina University)

Abstract

Levitt (2004) suggested that sportsbooks do not set prices in the NFL to clear markets, as was commonly assumed, but set prices to maximize profits. This paper uses actual betting data from four sportsbooks to test the Levitt (2004) hypothesis in the NBA. For a sample of the 2004-05 to 2006-07 seasons, it is shown that favorites receive a disproportionate share of NBA pointspread bets. In addition, the percentage of bets the favorite receives increases with each additional point of the pointspread. In the totals market, it is shown that overs receive a much higher percentage of bets compared to unders and the percentage bet on the over increases with each point of the total. Unlike the NFL, however, taking a contrarian position and betting against public sentiment is not found to win more often than implied by efficiency.

Suggested Citation

  • Rodney J. Paul & Andrew P. Weinbach, 2008. "Price Setting in the NBA Gambling Market: Tests of the Levitt Model of Sportsbook Behavior," International Journal of Sport Finance, Fitness Information Technology, vol. 3(3), pages 137-145, August.
    • Handle: RePEc:jsf:intjsf:v:3:y:2008:i:3:p:137-145
    as

    Download full text from publisher

    File URL: http://wvuecommerce.wvu.edu/index.cfm?do=product.products&id=64736841_91w&category_id=70&sub_cat_id=470
    Download Restriction: Full-text download requires subscription from FIT.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    efficient markets; gambling; sportsbook;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jsf:intjsf:v:3:y:2008:i:3:p:137-145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Victor Matheson (email available below). General contact details of provider: http://www.fitinfotech.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.