| Abstract: | Sports and racetrack betting markets have been investigated by researchers for more than 50 years. Many authors have argued that the observed biases and inefficiencies in these markets are a consequence of bettors incorrectly assessing the objective probabilities that favorites or underdogs will win. This article is the first examination of the National Football League season wins total over/under betting market where the designations of favorite and longshot do not apply. The market is found to be highly inefficient, providing several opportunities for profitable wagering. We believe these inefficiencies are a consequence of the representativeness heuristic. Most significantly, there is evidence that bettors, when considering teams with strong records in the previous season, overreact to historical performance and fail to recognize the statistical phenomenon of regression to the mean. |
