REPRESENTATIVENESS IN THE MARKET FOR BETS ON NATIONAL-FOOTBALL-LEAGUEGAMES

In laboratory experiments the representativeness heuristic has been sh own to affect participants' judgments. Finding representativeness in a real-world economic market would indicate that even decision makers w ho are highly experienced and motivated use the heuristic, and would, in addition, violate the efficient market hypotheses, i.e. the theory that market prices fully reflect all available information. Testing fo r representativeness in the market for bets on National Football Leagu es games avoids complications that make tests of representativeness in a stock market difficult to interpret. Evidence for representativenes s in the NFL betting market is found in a data set from an earlier stu dy which failed to test for representativeness, and in the 1976-9 mark et. Representativeness does not appear to exist in the contemporary ma rket, however, perhaps because with the advent of the personal compute r the market depends less on purely human judgment.