Smarty's Belmont a Classic Favorite/Longshot Bias example

[highnote]

(parts of this appear elsewhere)

The longshots subsidize favorites in the place and show pool. The public does not do a good job estimating the place and show pool odds. That is part of the reason these anomalies exist.

Also a lot of people will overbet the longshots to place and show figuring they will offer value if they come in. When the overbet longshots run out of the money that also helps subsidize the favorite's place and show payoffs.

And vice-versa, people don't want to bet the favorite to place or show thinking it offers no value. As we saw in the Belmont there was plenty of value on Smarty to place and show.

This is a classic example of the favorite-longshot bias at work.

[Valuist]

I agree 100%. I think part of it is that horses like Rock Hard Ten, who was the 2nd favorite, was making an all out attempt to win and when things started going bad they start backing up quickly (same definitely applied even moreso to Purge). Then you have a horse like Royal Assault, who probably knew he had almost no shot at winning and he clunks up for 3rd. In everyday races we'll maybe see 3 definitive favorites in a race; one usually wins but the other two are often broken.

[andicap]

Originally posted by swetyejohn
(parts of this appear elsewhere)

The longshots subsidize favorites in the place and show pool. The public does not do a good job estimating the place and show pool odds. That is part of the reason these anomalies exist.

Also a lot of people will overbet the longshots to place and show figuring they will offer value if they come in. When the overbet longshots run out of the money that also helps subsidize the favorite's place and show payoffs.

And vice-versa, people don't want to bet the favorite to place or show thinking it offers no value. As we saw in the Belmont there was plenty of value on Smarty to place and show.

This is a classic example of the favorite-longshot bias at work.

Is this similar to Ziemba's work where he claims overlays are available on favorites for place and show because the crowed overbets longshots.
And with sophisticated software and "whales" doing arbitrage every day on pools across the country, isn't it more difficult to find these bargains than it once was.
With SJ the pool was so large the wise guys couldn't bet enough to affect it.

I would postulate the favorite-longshot bias is not nearly as pronounced it as once was because of the late, heavy bettors. And becase they generally bet at the last minute you can think you're getting $4.00 on a 2-1 shot and then see it end up as $3.20 when the race is over.

So if the whales are piling on short odds overlays at the last minute,has this helped the place odds on longer priced horses???

[highnote]

Originally posted by andicap
Is this similar to Ziemba's work where he claims overlays are available on favorites for place and show because the crowed overbets longshots.

Yes. And they also underbet favorites.

And with sophisticated software and "whales" doing arbitrage every day on pools across the country, isn't it more difficult to find these bargains than it once was.

I don't know about doing arbitrage because I think all the money ends up in one pool, doesn't it?

There seems to be a school of thought that these overlays are more difficult to find than in the past. Personally, I have not found that to be the case.


With SJ the pool was so large the wise guys couldn't bet enough to affect it.


That's probably correct. I know I couldn't bet enough to affect it. :)


I would postulate the favorite-longshot bias is not nearly as pronounced it as once was because of the late, heavy bettors. And becase they generally bet at the last minute you can think you're getting $4.00 on a 2-1 shot and then see it end up as $3.20 when the race is over.


I think the fav/ls bias may still be as pronounced. It may be harder to detect in advance because of all the money coming in from around the globe at the last minute.


So if the whales are piling on short odds overlays at the last minute,has this helped the place odds on longer priced horses???

I would say yes if the short odds horse runs out of the money. When the favorite runs in the money then place and show bets on longshots subsidize the favorite.

[GameTheory]

Place & show prices on favorites offer value even with no bias, simply because the pools are shared with the other in the money horses (first two for place, all three for show). If you bet on the favorite to place and the second runner is a longshot, your payoff goes up. Whereas if you bet on a longshot to place/show, your price will be killed if you share the pool with the favorite. Betting show on extreme favorites will generally show a higher ROI than betting to win on them. But the pools are much smaller, so I doubt the whales are hammering them too much...

[highnote]

Throw in a 7% rebate from Pinnacle and things really start to look good.

[kenwoodallpromos]

Let me know if anybody starts putting place or show picks in the Selections forum. I do not because with a 90% payoff rate no one but me is interested. What is the last time you made a place or show pick on PA?

[andicap]

Originally posted by swetyejohn
Throw in a 7% rebate from Pinnacle and things really start to look good.

To my knowledge, there are no rebates on show bets.

[Jeff P]

From Pinnacle's Horse Rules Web Page:

Place and Show wagers that pay $2.10 for $2 or $2.20 for $2 are not eligible for a rebate.

[Jeff P]

The thing is, just about every time I run a "what if" study against my database for a given method of play the WIN pool just about always shows higher total dollars returned than either place or show. Therefore about 95% of my bets go into the win pool. Interesting thing though, looking at the place pool in the Belmont before the race and I could see that the amount of money bet on Smarty to place was proportionately lower than the win pool. Still, I wasn't tempted. A $3.00 and change place price is just contrary to my way of thinking. The old adage bet a little to win a lot- never bet a lot to win a little attached itself somewhere in the back of my brain several years ago and has become part of my permanent thought process when it comes to playing the races.