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POINT SHAVING IN COLLEGE BASKETBALL: A CAUTIONARY TALE FOR FORENSIC ECONOMICS
Author(s) -
BERNHARDT DAN,
HESTON STEVEN
Publication year - 2010
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2009.00253.x
Subject(s) - basketball , point (geometry) , exploit , advertising , economics , yield (engineering) , marketing , microeconomics , computer science , business , computer security , history , mathematics , materials science , geometry , archaeology , metallurgy
Point shaving is the practice by favored teams of attempting to win by less than the point spread to yield profits for gamblers who bet on the underdog. Consistent with point shaving, strong favorites are anomalously likely to win by less than the spread. To distinguish between innocent and criminal explanations, we (1) exploit information in line movements and (2) isolate games without betting lines to identify games where point shaving is implausible and document similar patterns. The data are better explained by strategic efforts to maximize the probability of winning. These findings highlight the importance of methodology design. ( JEL L83, K42)