Graduation Year
2015
Date of Submission
12-2014
Document Type
Open Access Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Richard Burdekin
Terms of Use & License Information
Rights Information
© 2014 Philip S. Crawford
Abstract
Participants in the NFL gambling market can largely be divided into two distinct groups: informed bettors (“Sharps”) and uninformed bettors (“Squares”). Empirical and anecdotal evidence suggest that the dynamic between Sharp and Square bettors is very similar to that between institutional and retail investors. Professionals tend to be far better informed and utilize rational betting/investing strategies while individuals exhibit biases which perpetuate irrational strategies and therefore pricing inefficiencies. This study finds that uninformed participants in financial markets and the NFL betting market do share similar biases, and that these biases can be exploited by informed participants to generate positive excess returns. The ability of Sharp bettors to generate excess returns, much like professional investors, is well covered in academic research. This study adds to the existing literature by analyzing whether “Follower” bettors can achieve statistically significant excess returns and higher than expected winning percentages by identifying reverse line movements and imitating the bets of Sharp gamblers.
Recommended Citation
Crawford, Philip S., "Reverse Line Movements in NFL Gambling: Parallels to Financial Market Biases and the Imitation of Informed Bettor Strategies" (2015). CMC Senior Theses. 1007.
https://scholarship.claremont.edu/cmc_theses/1007
