Sentiment Bias and Asset Prices: Evidence from Sports Betting Markets and Social Media

11 Pages Posted: 14 May 2020

See all articles by Arne Feddersen

Arne Feddersen

University of Southern Denmark - Department of Environmental and Business Economics

Brad R. Humphreys

West Virginia University - Department of Economics

Brian Soebbing

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

Date Written: April 2017

Abstract

Previous research using attendance‐based proxies for sentiment bias in sports betting markets confirmed the presence of investor sentiment in these markets. We use data from social media (Facebook “”) to proxy for sentiment bias and analyze variation in bookmakers' prices investor sentiment. Based on betting data from seven professional sports leagues in Europe and North America, we find evidence that bookmakers increase prices for bets on teams with relatively more Facebook “,” indicating the presence of price‐insensitive investors with sentiment bias. These price changes do not affect informational efficiency in this market.

JEL Classification: L81, G14

Suggested Citation

Feddersen, Arne and Humphreys, Brad R. and Soebbing, Brian, Sentiment Bias and Asset Prices: Evidence from Sports Betting Markets and Social Media (April 2017). Economic Inquiry, Vol. 55, Issue 2, pp. 1119-1129, 2017, Available at SSRN: https://ssrn.com/abstract=3596358 or http://dx.doi.org/10.1111/ecin.12404

Arne Feddersen (Contact Author)

University of Southern Denmark - Department of Environmental and Business Economics ( email )

DK-5230 Odense
Denmark

Brad R. Humphreys

West Virginia University - Department of Economics ( email )

Morgantown, WV 26506
United States

Brian Soebbing

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

Edmonton, Alberta
Canada

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