INFORMATION AND IDIOSYNCRATIC RISK IN THE NCAA MEN’S BASKETBALL BETTING MARKET

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Published: Jan 2, 2013
DOI: https://doi.org/10.5750/jgbe.v5i3.572
Keywords:
information idiosyncratic risk NCAA basketball betting markets market efficiency synchronicity CAPM market model competitive balance power ratings team-specific information conference-specific information

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Ira Horowitz
University of Florida

Abstract

Betting lines and scores from the 2009/10 college basketball season for 169 mid-major and major colleges are used to verify the efficiency hypothesis for the betting-market analogy to the CAPM-based market model. As in that model, the portion of the variance in the spreads that is unexplained by the betting lines is the idiosyncratic risk associated with a team’s games. The paper shows that this risk is due to team-specific and conference-specific informational and consistency-of-play factors that impact bettors’ decisions.

Article Details

Issue
Vol. 5 No. 3 (2011)
Section
Articles

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