Market Efficiency and the Setting of Salaries for NBA Daily Fantasy on FanDuel and Draft Kings

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Published: Dec 21, 2020
DOI: https://doi.org/10.5750/jpm.v14i2.1813
Keywords:
market efficiency daily fantasy sports pricing

Main Article Content

Rodney Paul
Syracuse University
Andrew Weinbach
Coastal Carolina University
Jeremy Losak
Syracuse University

Abstract

The market for daily fantasy sports for the NBA is examined with respect to efficiency when pricing player salaries for the games.  Simple factors such as home court advantage, rest, and opponent are shown to significantly effect performance beyond posted salaries in the respective markets.  In addition, a “hot hand” effect is found in that players that exceed expectations in previous games are shown to outperform salary-based expectations in the next contest.  These factors yield a rejection of market efficiency as it relates to salaries in the marketplace.  Legal ramifications for these contests as games of skill are examined.

Article Details

Issue
Vol. 14 No. 2 (2020)
Section
Articles
Author Biographies

Rodney Paul, Syracuse University

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

Andrew Weinbach, Coastal Carolina University

Professor - Economics PHD - Applied Economics - Clemson University

Jeremy Losak, Syracuse University

Assistant Professor - Department of Sport Management - Syracuse University PhD - Applied Economics - Clemson University

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