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Int. J. Financial Stud., Volume 2, Issue 2 (June 2014), Pages 179-219

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Research

Open AccessArticle The Effects of the Clock and Kickoff Rule Changes on Actual and Market-Based Expected Scoring in NCAA Football
Int. J. Financial Stud. 2014, 2(2), 179-192; doi:10.3390/ijfs2020179
Received: 28 February 2014 / Revised: 1 April 2014 / Accepted: 9 April 2014 / Published: 16 April 2014
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Abstract
Clock rule changes were introduced in the 2006 season with the goal of reducing the average duration of the game; these changes were reversed in 2007. In addition, in 2007 the kickoff rule was changed to create more excitement and potentially more [...] Read more.
Clock rule changes were introduced in the 2006 season with the goal of reducing the average duration of the game; these changes were reversed in 2007. In addition, in 2007 the kickoff rule was changed to create more excitement and potentially more scoring. We examine what happened to actual and expected scoring during these National Collegiate Athletic Association (NCAA) football seasons. The clock rule change in 2006 led to lower scoring which was not fully encompassed in the betting market, leading to significant returns to betting the under. Multiple rule changes in 2007 led to volatility in the betting market that subsided by season’s end. Full article
(This article belongs to the Special Issue Sports Finance)
Open AccessArticle Market Efficiency and Behavioral Biases in the WNBA Betting Market
Int. J. Financial Stud. 2014, 2(2), 193-202; doi:10.3390/ijfs2020193
Received: 24 February 2014 / Revised: 9 April 2014 / Accepted: 14 April 2014 / Published: 24 April 2014
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Abstract
The betting market for the Women’s National Basketball Association (WNBA) is a thin financial market, which does not attract much interest from sports bettors. Given these characteristics, it is possible that profitable wagering strategies could exist for informed bettors of the WNBA. [...] Read more.
The betting market for the Women’s National Basketball Association (WNBA) is a thin financial market, which does not attract much interest from sports bettors. Given these characteristics, it is possible that profitable wagering strategies could exist for informed bettors of the WNBA. Using betting data on the WNBA from 2007–2012, we find that simple betting strategies do not earn statistically significant returns. WNBA bettors are like NBA bettors; however, in that they strongly prefer the best teams, particularly when they are on the road. Despite this clear bias, betting against the most popular public wagers is not found to earn statistically significant profits. Full article
(This article belongs to the Special Issue Sports Finance)
Open AccessArticle Does Trading by Small Investors Improve or Deteriorate Price Efficiency? Evidence from the Minimum Trade Unit Changes on the Korea Exchange
Int. J. Financial Stud. 2014, 2(2), 203-219; doi:10.3390/ijfs2020203
Received: 4 April 2014 / Revised: 28 April 2014 / Accepted: 28 April 2014 / Published: 12 May 2014
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Abstract
In this study, we investigate the effect of minimum trade unit (MTU) reductions on the Korea Exchange (KRX) on price efficiency. The KRX switched its MTU from 10 shares to one share for high-price stocks twice, once in December 2004 and once [...] Read more.
In this study, we investigate the effect of minimum trade unit (MTU) reductions on the Korea Exchange (KRX) on price efficiency. The KRX switched its MTU from 10 shares to one share for high-price stocks twice, once in December 2004 and once in July 2006. The MTU changes were intended to attract small individual investors to the markets for high-price stocks. The MTU reductions on the KRX are different from previous cases of MTU reductions in other markets in that the KRX MTU reductions are not chosen by firms but are mandated by the exchange. Using these rare events, we examine whether the reductions in MTU and ensuing small investor participation enhance or deteriorate price efficiency. We examine three variables as indicators of price efficiency: return volatility, residual volatility, and the half-life of return volatility shock estimated from a generalized autoregressive conditional heteroskedasticity (GARCH) model. We find evidence of improved price efficiency from the 2004 event. For the 2004 sample, both return variance and residual return variance declined significantly after the MTU reduction. We also find evidence of reduction, albeit weak, in the half-life of volatility shock for the same sample. Meanwhile, for the 2006 sample, we do not find any changes in return variance or residual variance, nor do we find any evidence of change in the half-life of volatility shock. The difference in the patterns of changes in variables between the 2004 and 2006 events appears to be attributable to differences in the price levels of the stocks that were affected by the MTU changes and, consequently, a difference in reactions by small investors. Full article

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