Momentum and betting market perceptions of momentum in college football

ABSTRACT

Past research has demonstrated that bettors believe positive momentum carries over from contest to contest. This article examines whether there is any empirical support for this belief by testing for the presence of across-contest momentum effects in college football. We characterize momentum in multiple fashions and after controlling for between-team heterogeneity find no evidence that systematic relationships exist between the degree of momentum a team enters a contest with and the outcome of that contest. From a wagering market perspective, this indicates that there is no statistically significant advantage to betting on teams perceived to possess positive momentum. Our results also suggest that the combination of the opening betting line set by odds makers and the subsequent market movement of that line does not systematically overreact to teams on streaks.

KEYWORDS:

• Momentum
• betting markets
• college football
• NCAA

JEL CLASSIFICATION:

• D84
• L83
• Z21

Acknowledgements

The authors wish to thank Eric Brown for his assistance with data collection and Brian Mills, Thomas Peeters and Scott Tainsky for their helpful comments. We also thank Editor David Peel, an anonymous reviewer as well as two anonymous reviewers from a previous version of this manuscript.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ For example, the first column of the bottom panel of Table 1 (Model WH1) tests whether the exact six-game outcome sequence of five wins followed by a loss is associated with the contest outcome in game seven.

² Bruce Payne’s power ratings archive can be found at: http://knology.net/~brucepayne/.