Economics, Finance and Quantitative Analysis
To illustrate economic testing and at the same time to conduct an inquiry into the efficiency of the college football betting market, an analysis applies all the betting rules reported by Stark (1992) to the 10 teams comprising the Southeastern Conference before the recent addition of the universities of Arkansas and South Carolina. The combination of 10 teams and 7 conditions produces a total of 70 betting strategies. Since each rule to bet for a team is shadowed by the alternative of betting against that team, the actual number of rules tested is 140. Among those 140 rules, only 7 met the qualifications necessary to be considered superior - that is, a wins-to-bets ratio greater than 52.4% and a probability of random duplication less than 5%. The best rule to emerge from the set is to bet on the University of Florida when it is the favorite. Other good rules to follow are to bet against Kentucky when it is the favorite and to bet against Tennessee in October.
Arkansas Business and Economic Review