Do Gamblers Think that Teams Tank? Evidence from the NBA

13 Pages Posted: 26 Feb 2013

See all articles by Brian Soebbing

Brian Soebbing

University of Alberta-Faculty of Kinesiology, Sport, and Recreation

Brad R. Humphreys

West Virginia University - Department of Economics

Date Written: April 2013

Abstract

A growing body of literature indicates that sports teams face incentives to lose games at the end of the season. This incentive arises from a league's entry draft policy. We use data from betting markets to confirm the existence of tanking, or the perception of tanking, in the National Basketball Association (NBA). Results from a Seemingly Unrelated Regression (SUR) model of point spreads and point differences in NBA games indicate that betting markets believe that tanking takes place in the NBA, even though the evidence that tanking actually exists is mixed. Other NBA policy changes also affect betting market outcomes.

JEL Classification: D0, L0

Suggested Citation

Soebbing, Brian and Humphreys, Brad R., Do Gamblers Think that Teams Tank? Evidence from the NBA (April 2013). Contemporary Economic Policy, Vol. 31, Issue 2, pp. 301-313, 2013, Available at SSRN: https://ssrn.com/abstract=2224475 or http://dx.doi.org/10.1111/j.1465-7287.2011.00298.x

Brian Soebbing (Contact Author)

University of Alberta-Faculty of Kinesiology, Sport, and Recreation

Edmonton, Alberta
Canada

Brad R. Humphreys

West Virginia University - Department of Economics ( email )

Morgantown, WV 26506
United States

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