NFL Betting Picks: Indianapolis Colts +4 @ Jacksonville Jaguars

Many of our NFL betting picks are based on an effort to exploit cognitive bias evident in the marketplace, and not so much on our assessment of fundamental capacities of the involved teams. We suspect this top-down approach is effective because bookmakers are quite adept at discounting differentials in talent between opposing teams (that favorites/underdogs are 49%/51% versus the number since the 2003-04 NFL season, which is not statistically significantly different than 50% at the 95% confidence level, evidences linemakers' prowess). Thus, it is difficult, but not impossible, to demonstrate a sustainable edge capping games using a bottom-up framework.

Conversely, by seeking to exploit casual bettor's psychology-driven propensities, we can align ourselves with the most successful constituency in the gambling ecosystem, bookmakers, who likewise seek to take advantage of the public's irrational tendencies (to this point, Levitt (2004) concluded that linemakers set prices to capitalize on bettor biases, while Humphreys (2011) noted that sportsbooks tolerate unbalanced betting in order to generate excess profits).

One of the most enduring behavioral patterns we have observed is recency bias, or the erroneous overweighting of near-term outcomes in decision-making processes. Our play on the Colts for the week 6 cover is rooted in the expectation that the betting line is mispriced as books juice the Jaguars' line to benefit from an expected aversion to taking the points with Indy, who finished last year with a meager 4-12-1 SU record.

Further, generally speaking, we suspect that Joe Public over-estimates the value of home field, which only exacerbates herding around favorites and the value with underdogs in this spot.

The angle indicated in the graphic has proven good for a statistically significant (at the 95% confidence level) 13% long-term return on investment.

Happy betting!!