March Madness and Investor Mood

Marcin Krolikowski

University of South Florida - College of Business Administration

November 18, 2012

We examine the relationship between NCAA basketball end-of-season tournament (“March Madness”) results and stock returns of firms located in the vicinity of competing teams’ campuses. We find that stocks of firms located around expected winners (higher ranked teams) perform poorly if the team unexpectedly loses. For example, an upset loss leads to abnormal stock returns of -41 basis points. The decline following all basketball losses is also significant but investors punish unexpected losses more. These results, associated with upsets persist and intensify with riskier stocks, more important games and closer distance. The returns around winning universities are found to be less significant.

Number of Pages in PDF File: 20

Keywords: Behavior Finance, Sports Sentiment

JEL Classification: G12, G14

Open PDF in Browser Download This Paper

Date posted: November 19, 2012  

Suggested Citation

Krolikowski, Marcin, March Madness and Investor Mood (November 18, 2012). Available at SSRN: https://ssrn.com/abstract=2177597 or http://dx.doi.org/10.2139/ssrn.2177597

Contact Information

Marcin Krolikowski (Contact Author)
University of South Florida - College of Business Administration ( email )
4202 E. Fowler Avenue, BSN 3403
Tampa, FL 33620-5500
United States
Feedback to SSRN

Paper statistics
Abstract Views: 1,111
Downloads: 71
Download Rank: 262,118