The Impact of Information Release on Line Accuracy and Line Movement
Research examining how information influences pricing, efficiency, and line accuracy in sports betting markets is common. The existing literature, however, does not consider that the natural release of information through standard game play may be systematically related to changes in line accuracy. We test this hypothesis and find a statistically significant improvement in line accuracy in both the sides and totals markets as more information is released. This indicates the information produced through game play is valuable in improving contest forecasts by both oddsmakers and the market. We also find a reduction in line movement in both the sides and totals markets as more information is released, suggesting forecasts of oddsmakers and the market converge along with an increase in available information.
Keywords: information availability, betting markets, line accuracy, line movement, sports betting
JEL Codes: G14, L83, Z2