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The Reverse Favorite-Longshot Bias in the National Hockey League: Do Bettors Still Score on Longshots?

Author

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  • Linda M. Woodland

    (Department of Accounting and Finance, Eastern Michigan University, MI, USA, LWoodland@emich.edu)

  • Bill M. Woodland

    (Department of Economics, Eastern Michigan University, MI, USA)

Abstract

The favorite—longshot bias, the tendency of bettors to underbet favorites and overbet longshots (underdogs), has received considerable attention in the economics and finance literature. Although the bias is prevalent in racetrack betting, with pari-mutuel odds, researchers have detected a reverse bias in two fixed-odds betting markets in the United States. A weak bias was documented for Major League Baseball for 22 seasons. It was also found to be present in the National Hockey League betting market and was of sufficient strength to allow for profitable wagering opportunities. This article analyzes 10 additional seasons of hockey wagering. The bias is sustained for the first three seasons but disappears in the last seven seasons as the market converges to efficiency. This contrasts with the baseball betting market, where the bias persists.

Suggested Citation

  • Linda M. Woodland & Bill M. Woodland, 2011. "The Reverse Favorite-Longshot Bias in the National Hockey League: Do Bettors Still Score on Longshots?," Journal of Sports Economics, , vol. 12(1), pages 106-117, February.
    • Handle: RePEc:sae:jospec:v:12:y:2011:i:1:p:106-117
    DOI: 10.1177/1527002510368792
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    References listed on IDEAS

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    1. Linda M. Woodland & Bill M. Woodland, 2001. "Market Efficiency and Profitable Wagering in the National Hockey League: Can Bettors Score on Longshots?," Southern Economic Journal, John Wiley & Sons, vol. 67(4), pages 983-995, April.
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    Cited by:

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    2. Simon Kloker & Tim Straub & Christof Weinhardt, 2019. "Moderators for Partition Dependence in Prediction Markets," Group Decision and Negotiation, Springer, vol. 28(4), pages 723-756, August.
    3. Jaume García & Levi Pérez & Plácido Rodríguez, 2017. "Forecasting football match results: are the many smarter than the few?," Chapters, in: Plácido Rodríguez & Brad R. Humphreys & Robert Simmons (ed.), The Economics of Sports Betting, chapter 5, pages 71-91, Edward Elgar Publishing.
    4. Berkowitz, Jason P. & Depken, Craig A. & Gandar, John M., 2017. "A favorite-longshot bias in fixed-odds betting markets: Evidence from college basketball and college football," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 233-239.
    5. David Alan Peel, 2013. "On the Implications of the Markowitz Model of Utility embodying Gain Seeking Preferences for Odds on Betting and Bookmakers choice of Spread or Odds Betting," Economics Bulletin, AccessEcon, vol. 33(2), pages 1420-1428.
    6. Christian Deutscher & Marius Ötting & Sandra Schneemann & Hendrik Scholten, 2019. "The Demand for English Premier League Soccer Betting," Journal of Sports Economics, , vol. 20(4), pages 556-579, May.
    7. Daniel C. Hickman, 2020. "Efficiency in the madness? examining the betting market for the ncaa men’s basketball tournament," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(3), pages 611-626, July.

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