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 the financial literature regarding investor behavior. Consistent with an anchoring bias, we find that bettors prefer to bet on teams with better pre-season Super Bowl odds throughout the entire season. Importantly, we document that there is a significant relationship with profitability and pre-season odds in weeks two through eight of the NFL season, suggesting that sportsbooks do not take advantage of gamblers’ biases. Additionally, we provide evidence that sportsbooks continue to incorporate pre-season odds into their closing lines throughout the entire season, suggesting they may anchor to pre-season odds themselves. Our findings offer novel insights into anchoring behavior with important implications for understanding biases in financial markets.