The “Large-Firm” Effect? Bettor Preferences and Market Prices in NCAA Football

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Published: Oct 4, 2013
DOI: https://doi.org/10.5750/jpm.v7i2.751
Keywords:
Efficient Markets Betting Markets Behavioral Finance

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Rodney Paul
Syracuse University
Andrew P. Weinbach
Coastal Carolina University
Eric Higger
Syracuse University

Abstract

Abstract: NCAA football has a clear classification of “large” (AQ) and “small” (non-AQ) conferences.  This setting lends itself to the testing of the “small-firm” effect found in financial markets in the college football betting market.  The “small-firm” effect occurs when small cap firms outperform large cap firms; typically attributed to difficulty and costs in finding information on small firms.  In college football, AQ-teams win more than implied by efficiency against non-AQ teams.  At the same time, AQ teams receive a disproportionate share of bets on these games.  The likely rationale behind these findings is the incentives created by the BCS system which leads the point spread to not be a true random variable within this market.

Article Details

Issue
Vol. 7 No. 2 (2013)
Section
Articles
Author Biography

Rodney Paul, Syracuse University

Professor - Department of Sport Management - Syracuse UniversityPhD - Applied Economics - Clemson University 2000

References

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