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| Author: | Swidler, S. Shaw, R. |
| Title: | Racetrack wagering and the "uninformed" bettor: a study of market efficiency |
| Journal: | Quarterly Journal of Economics
1995 : FALL, VOL. 35:3, p. 305-314 |
| Index terms: | GAMBLING INDUSTRY MARKET EFFICIENCY FINANCE |
| Language: | eng |
| Abstract: | The analysis examines the wagering behavior of the "uninformed" bettor. Using data from a second tier racetrack, the high correlation between subjective and objective probabilities suggests an efficient win pool. However, the results fail to demonstrate the public's tendency to underbet favourites and overbet longshots. Employing computer intensive statistical methods, a second part of the analysis suggests that mispricing does exist in the place and show pools, although the size of these inefficiencies may be of small economic consequences. |
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