skip to content
Explaining the favorite-longshot bias : is it risk-love or misperceptions? Preview this item
ClosePreview this item
Checking...

Explaining the favorite-longshot bias : is it risk-love or misperceptions?

Author: Erik Snowberg; Justin Wolfers; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, ©2010.
Series: Working paper series (National Bureau of Economic Research), no. 15923.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Database:WorldCat
Summary:
The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning--longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet longshots due to risk-love. The competing behavioral explanations emphasize the role of misperceptions of probabilities. We  Read more...
Rating:

(not yet rated) 0 with reviews - Be the first.

Subjects
More like this

 

Find a copy online

Find a copy in the library

&AllPage.SpinnerRetrieving; Finding libraries that hold this item...

Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Erik Snowberg; Justin Wolfers; National Bureau of Economic Research.
OCLC Number: 609896850
Notes: "April 2010."
Title from http://www.nber.org/papers/w15923 viewed Apr. 28, 2010.
Description: 1 online resource (27 p.) : ill.
Series Title: Working paper series (National Bureau of Economic Research), no. 15923.
Responsibility: Erik Snowberg, Justin Wolfers.

Abstract:

The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning--longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet longshots due to risk-love. The competing behavioral explanations emphasize the role of misperceptions of probabilities. We provide novel empirical tests that can discriminate between these competing theories by assessing whether the models that explain gamblers' choices in one part of their choice set (betting to win) can also rationalize decisions over a wider choice set, including compound bets in the exacta, quinella or trifecta pools. Using a new, large-scale dataset ideally suited to implement these tests we find evidence in favor of the view that misperceptions of probability drive the favorite-longshot bias, as suggested by Prospect Theory.

Reviews

User-contributed reviews
Retrieving GoodReads reviews...
Retrieving DOGObooks reviews...

Tags

Be the first.

Similar Items

Confirm this request

You may have already requested this item. Please select Ok if you would like to proceed with this request anyway.

Linked Data


<http://www.worldcat.org/oclc/609896850>
library:oclcnum"609896850"
library:placeOfPublication
library:placeOfPublication
owl:sameAs<info:oclcnum/609896850>
rdf:typeschema:Book
schema:about
schema:bookFormatschema:EBook
schema:contributor
schema:contributor
schema:copyrightYear"2010"
schema:creator
schema:datePublished"2010"
schema:description"The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning--longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet longshots due to risk-love. The competing behavioral explanations emphasize the role of misperceptions of probabilities. We provide novel empirical tests that can discriminate between these competing theories by assessing whether the models that explain gamblers' choices in one part of their choice set (betting to win) can also rationalize decisions over a wider choice set, including compound bets in the exacta, quinella or trifecta pools. Using a new, large-scale dataset ideally suited to implement these tests we find evidence in favor of the view that misperceptions of probability drive the favorite-longshot bias, as suggested by Prospect Theory."@en
schema:exampleOfWork<http://worldcat.org/entity/work/id/503906203>
schema:inLanguage"en"
schema:name"Explaining the favorite-longshot bias is it risk-love or misperceptions?"@en
schema:publisher
schema:url
schema:url<http://papers.nber.org/papers/w15923>

Content-negotiable representations

Close Window

Please sign in to WorldCat 

Don't have an account? You can easily create a free account.