Because of the newness of the Daily Fantasy Sports industry, it has been, at least to this point, largely understudied by scholars.
Most scholarly articles (and by “most” we mean a handful) focus on Daily Fantasy’s potential legal issues—both in the present and the future—and the likelihood that the industry will be able to continue operating as a legal form of betting by exploiting a loophole in the UIGEA.
In related fields, such as sports betting and poker, there are dozens of peer-reviewed journal articles that study market inefficiencies, game theory, proper strategy and bankroll management, among other topics, which contributes to our knowledge base as players.
But in DFS, there’s virtually nothing in these areas. To be exact, we’ve been exposed to only one such study—which was shared Monday by a user in the DFT forum.
Benny Goldman, an economics major at Macalester College, published an article that explores possible pricing inefficiencies in the Daily Fantasy NHL market.
Here are a few of the more interesting findings, some of which might be applicable to other daily sports, such as NBA or MLB:
- Players who are playing at home score more fantasy points, but do not cost more.
- The market is undervaluing players who are playing in their home arena and overvaluing visiting players.
- The strength of a player’s opponent relative to their own team has a large effect on performance, but no observable effect on price. Playing a poorer team leads to economically significant increases in performance and undervaluation in the market.
- Players who have performed very well in the past few games relative to their usual performance are highly overvalued. In fact, in some specifications this actually had a negative effect on performance and a positive effect on price, increasing the market error.
If you stumble on a DFS-related scholarly article, feel free to email us at [email protected].