Anchoring Bias in the NFL Gambling Market

Abstract

We explore the impact of the anchoring bias in the NFL betting market to overcome limitations within financial literature regarding investor behavior. Consistent with an anchoring bias, we find bettors prefer to bet on teams with better pre-season Super Bowl odds throughout the entire season. We further document that this strategy has a significant inverse relationship to profitability in week 1 of the NFL season.  Furthermore, we show sportsbooks continue to incorporate pre-season odds into their closing lines throughout the entire season, suggesting they may anchor to pre-season odds as well. These results have important implications for financial markets.

Keywords: Anchoring Bias, Behavioral Bias, NFL, Gambling