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Representativeness in the Market for Bets on National Football League Games
Author(s) -
Tassoni Charles John
Publication year - 1996
Publication title -
journal of behavioral decision making
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.136
H-Index - 76
eISSN - 1099-0771
pISSN - 0894-3257
DOI - 10.1002/(sici)1099-0771(199606)9:2<115::aid-bdm220>3.0.co;2-b
Subject(s) - representativeness heuristic , league , football , econometrics , economics , sports economics , computer science , mathematical economics , statistics , political science , mathematics , physics , astronomy , law
In laboratory experiments the representativeness heuristic has been shown to affect participants' judgments. Finding representativeness in a real‐world economic market would indicate that even decision makers who are highly experienced and motivated use the heuristic, and would, in addition, violate the efficient market hypotheses, i.e. the theory that market prices fully reflect all available information. Testing for representativeness in the market for bets on National Football Leagues games avoids complications that make tests of representativeness in a stock market difficult to interpret. Evidence for representativeness in the NFL betting market is found in a data set from an earlier study which failed to test for representativeness, and in the 1976– 9 market. Representativeness does not appear to exist in the contemporary market, however, perhaps because with the advent of the personal computer the market depends less on purely human judgment.