Featured Research

from universities, journals, and other organizations

What do investors and college football pollsters have in common?

Date:
December 5, 2013
Source:
Ohio State University
Summary:
When it comes to choosing the best college football teams in the nation or the best companies to invest in, even the experts tend to fall for the same types of biased thinking that the rest of us do.

When it comes to choosing the best college football teams in the nation or the best companies to invest in, even the experts tend to fall for the same types of biased thinking that the rest of us do.

Related Articles


In a study of more than 20 years of college football polls, an economist at The Ohio State University and his colleagues found that poll voters reward teams that perform just how the voters expected they would.

"As a college football team, if you just meet expectations, you are rewarded by the poll voters. If you are expected to win in a blowout, the voters think you ought to win in a blowout," said Trevon Logan, an associate professor of economics at Ohio State.

The research found that poll voters don't take into account strength of schedule or margin of victory when deciding which college football teams are the best.

What is important is winning and meeting expectations, which in college football games means beating teams by the expected margin, Logan said. But going over that margin is not especially helpful.

This year, Florida State University climbed from #11 in the preseason Associated Press poll to #1 this past week. They did it by going undefeated and beating outmatched teams handily, as they were expected to do.

Ohio State, on the other hand, has suffered in the polls some because it has not met expectations, with some closer-than-expected victories on the way to an unbeaten season.

"But why is Florida State climbing in the polls when they are doing exactly what you expected them to do? In some ways, it doesn't make sense," Logan said.

The tendency of pollsters to reward teams that meet their expectations is an example of a cognitive bias called confirmatory bias.

"Confirmatory bias is the tendency of people to accept weak evidence if it affirms beliefs they already hold," Logan said.

Logan said Wall Street investors show the same type of bias. When analysts expect a company's profits to increase 3 percent in a quarter, and the company meets that target, it is often rewarded with higher stock prices. But if that company increases profits for the quarter -- but only by 2 percent -- stock prices may fall.

"The company may have increased profits, but that doesn't matter if analysts expected more than the company delivered," he said. "That's an example of how confirmatory bias can work against a company."

Logan said his research shows that college football poll voters, despite their expertise, are subject to the same cognitive biases as the rest of us.

"No matter how much they know or how much they learn, human voters will always be subject to human biases," he said.

Logan conducted the study with Rodney Andrews of the University of Texas at Dallas and Michael Sinkey at the University of West Georgia. Their results were published as a National Bureau of Economic Research working paper.


Story Source:

The above story is based on materials provided by Ohio State University. Note: Materials may be edited for content and length.


Cite This Page:

Ohio State University. "What do investors and college football pollsters have in common?." ScienceDaily. ScienceDaily, 5 December 2013. <www.sciencedaily.com/releases/2013/12/131205091855.htm>.
Ohio State University. (2013, December 5). What do investors and college football pollsters have in common?. ScienceDaily. Retrieved March 29, 2015 from www.sciencedaily.com/releases/2013/12/131205091855.htm
Ohio State University. "What do investors and college football pollsters have in common?." ScienceDaily. www.sciencedaily.com/releases/2013/12/131205091855.htm (accessed March 29, 2015).

Share This


More From ScienceDaily



More Computers & Math News

Sunday, March 29, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Facebook Building Plane-Sized Drones For Global Internet

Facebook Building Plane-Sized Drones For Global Internet

Newsy (Mar. 27, 2015) Facebook on Thursday revealed more details about its Internet-connected drone project. The drone is bigger than a 737, but lighter than a car. Video provided by Newsy
Powered by NewsLook.com
Robot Returns from International Space Station and Sets Two Guinness World Records

Robot Returns from International Space Station and Sets Two Guinness World Records

Reuters - Light News Video Online (Mar. 27, 2015) The companion robot "Kirobo" returns to earth from the International Space Station and sets two Guinness World Records. Sharon Reich reports. Video provided by Reuters
Powered by NewsLook.com
Smart Bracelet Changes Design With the Touch of a Button

Smart Bracelet Changes Design With the Touch of a Button

Reuters - Innovations Video Online (Mar. 27, 2015) Interactive jewellery that allows users to change designs and doesn&apos;t need charging. Sharon Reich reports. Video provided by Reuters
Powered by NewsLook.com
Twitter's Periscope New Rival for Meerkat

Twitter's Periscope New Rival for Meerkat

Reuters - Business Video Online (Mar. 26, 2015) Twitter has unveiled Periscope, its live-streaming app to rival Meerkat and other emerging apps that have captured the attention of the social media industry. Bobbi Rebell reports. Video provided by Reuters
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Space & Time

Matter & Energy

Computers & Math

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins