Patience is a virtue: exploiting behavior bias in gambling markets

We examine the influence of bettor behavior in sports gambling markets and the resulting creation of exploitable betting opportunities for patient bettors. Specifically, we build on past research on behavioral bias as a predictor of bettor behavior and explore how this behavior can result in market inefficiencies. Using data from National Football League games taking place between 2007-2019, we find that bettor decision-making is erroneously influenced by recent performance of teams. This bias creates profitable betting opportunities for those less subject to recency bias, and are surprisingly greater for the more prudent, patient bettor. Our findings confirm the need for additional research examining the influence of psychology and behavioral biases on individual decision making and how these factors can influence market efficiency.