2022 NFL Week 1: Exploiting Market Biases to Kick off the New Season
Siding with 3 home dogs ATS: Taking points with the Texans, Falcons and Vikings
We have in the past covered the betting public's empiricallly supported predilection toward favorites and teams that experienced success over the near-term (see here for details).
As a real-life example of the public's recency bias and irrational tendency to back favorites versus the number (despite the equalizing effect of the spread), we have observed that expectations have generally proven too low for teams that did not make the prior playoffs and that start the current season facing familiar but superior opposition.
Backing teams that were bystanders in the last postseason and that are taking points from their division in their first action of the current season has generated a statistically significant 31% return on investment since 2003-04.
This system has suffered only three losing seasons over this span (one of which saw a 50% cover rate and therefore only a nominal loss).
For week 1 of the 2022-23 proceedings, plays on three home dogs are triggered, per this angle: the Texans +8 versus the Colts, the Falcons +6 versus the Saints and the Vikings +2 as hosts to the Packers.
This system does not distinguish between home and away teams fitting the aforementioned criteria, as both have been extremely profitable, however, academic research has identified a systematic bias against teams taking points in their own building. Dare & Dennis (2011), for instance, hypothesize that bettors tend to underestimate the scoring ability home dogs.
Thus, in addition to the conviction that our own work spawns, we take additional comfort from the reality that each of the three indicated picks boast home field advantage, given the evidence suggesting this circumstance increases the likelihood that betting spreads will be mispriced in our favor.