Favorite/Longshot Bias

[mauvais]

Hi folks

Has anyone got any links or information concerning recent studies in the US re favorite/longshot bias?

Thanks for any help :)

Mauvais

[mauvais]

Here's a couple of studies - one from the UK, another from Hong Kong and Japan

http://www.nottingham.ac.uk/business/1998-v.pdf

The UK study suggests the favorite bias only occurs with SP bookies, although longshot bias exists for parimutuel betting, but is fairly constant. Longshot bias with bookies quite large, and becomes larger as odds increase.

http://pareto.ucalgary.ca/%7Ewdwalls/papers/brokenodds.pdf

Here's a study from Hong Kong and Japan which suggests that the favorite/longshot bias is not as great as originally thought, the difference being attributed to the failure to account for breakage or rounding in earlier studies.

This summary from Dr Ziemba's book, Beat the Racetrack

The Dr. Z. system operates on the assumption that the public is very good at estimating the true probability of each horse¡¦s chances of winning. That is, the public¡¦s 2-to-1 shots win more often than their 5-to-2 shots do; their 5-to-2 win more often than their 3-to-1 shots do. And so on. In addition, the lower the public odds on a horse, the greater the return on that horse over the long run. For example, if you bet $2 on each horse whose public odds were 2-to-5, you¡¦d get 97.7 percent of your money back. By contrast, if you bet $2 on each horse whose public odds were 20-to-1, you¡¦d get back only 68.5 percent of your money.

This phenomenon is known as the "favorite-longshot bias." The average fan¡¦s bias against strong favorites is quite pronounced: in the author¡¦s study, horses whose public odds were 1-to-5 and lower actually returned a slight profit. The authors present it as evidence of the average fan¡¦s tendency to overbet longshot and to underbet strong favorites in order to satisfy his "greed for large profits." To paraphrase the authors, there isn¡¦t much profit or fame derived form betting on a 1-to-5 favorite who is the best bet of the day, so the average fan looks to horses and combination wagers with low probabilities and high payoffs. Unfortunately, the favorite-longshot bias for win bets is not enough to make positive profits by betting on all horses in any single odds category.

[mauvais]

Here is the paper by Hausch, Ziemba and Rubenstein

http://www.in-the-money.com/artandpap/Efficiency%20of%20the%20Market%20for%20Racetrack%2 0Betting.doc

[mauvais]

Here's another fairly comprehensive study - but would really appreciate anyone who can provide data on favorite/longshot bias - anyone out there with a large database who can run a test to compare starting prices with actual results, don't be shy!

http://hubcap.clemson.edu/~sauerr/work/wm.pdf

[Triple Trio]

According to BMeadow in a recent thread on the same subject, the bias doesn't exist in the US anymore.

http://www.paceadvantage.com/forum/showthread.php?s=&threadid=2419

[mauvais]

Many thanks for that TT

Cheers

Cheesebeast!!:D