Informed traders and price variations in the betting market for professional basketball games

• 成果类型: Article
• 署名作者: Gandar, JM; Dare, WH; Brown, CR; Zuber, RA
• 署名单位: University of North Carolina; University of North Carolina Charlotte; Massey University; Texas State University System; Texas State University San Marcos
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.155346
• 发表日期: 1998
• 页码: 385-401
• 关键词: HOT HAND; volatility; INFORMATION; rationality; believe; news

摘要

This paper examines betting line changes from the opening to the closing of the point spread betting market on National Basketball Association games for evidence of informed trader betting. We show that within-betting period line changes significantly improve the accuracy of betting lines as forecasts of game outcomes. We examine individual line change magnitudes and show that these are directly and proportionately related to biases in opening lines. Further, line changes are of sufficient magnitude to remove these biases by the close of betting. We interpret these results as evidence that informed traders are influential in this market.