Optimal Betting and Efficiency in Parimutuel Betting Markets with Information Costs

Datos Bibliográficos

ID9704943
AutoresDek Terrell (Kansas State University), Amy Farmer (0009-0007-4154-9664, University of Tennessee at Knoxville)
Año1996
Volumen106
Número437
Páginas846
Fecha de publicación1996-07-01
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.2307/2235361
OpenAlexW2054101497
IdiomaEN
Citas recibidas4
Referencias citadas10

Empirical studies of parimutuel games establish several facts not previously explained by theory. For example, market odds fail to provide accurate predictions of outcomes (Ali, 1979; Dolbear, 1993; Goodwin, 1993) and longshots earn lower expected values than other bets (Ali, 1977; Metzger, 1985). This paper outlines a model of parimutuel games in which such outcomes arise as a consequence of the takeout of the track. Bettors may purchase true probabilities of events, and equilibrium entry and wagers of these informed bettors lead to patterns observed in previous studies. A case study of the Woodlands Greyhound Park supplies evidence consistent with the model

Econometrics · Economics · Financial economics · Logistic regression · Microeconomics · Odds · Statistics · Consumer Market Behavior and Pricing · Economic and Environmental Valuation · Mathematics · Sports Analytics and Performance