Investigating the roots of the favourite-longshot bias: an analysis of decision making by supply- and demand-side agents in parallel betting markets

Complexity as a guide to understanding decision bias: A contribution to the favorite‐longshot bias debate

“…The methodology employed in Bruce and Johnson (2000) was also used to analyze the 2004 data and yielded remarkably similar results to those reported in the earlier paper (see Table 2), in terms of the predicted winning probabilities for horses in various odds ranges. Table 2.…”

“…Table 2. A comparison of predicted winning probabilities (arising from pari-mutuel and bookmaker odds) between those produced in Bruce and Johnson (2000) and those produced employing the Bruce and Johnson's (2000) Taken together, comparisons of the results of the application of the methodology suggested here with that employed in Bruce and Johnson (2000) confirm our decision to account for within-race competition using a CL model in this study; it is through this medium that the true incidence of the bias is unmasked.…”

“…As indicated above, previous research suggests that the FLB has been persistent across time and this is confirmed by comparing the results (presented below) obtained from analyzing 1996 data from the UK bookmaker and pari-mutuel betting markets, employed originally in Bruce and Johnson (2000), with the results of the current study. Consequently, the 2004 data employed in this study is regarded as a random sample drawn from all races run in the UK over recent years.…”

“…The value of the proposed technique for assessing the true degree of FLB in a market is illustrated by a reworking of the 1996 UK horserace data (19 396 horses, in 2109 races) employed in Bruce and Johnson (2000). They explored deviations of actual winning probability from those implied in the odds without directly accounting for within-race competition and, as a result, they detected no significant bias in the parimutuel market.…”

Complexity as a guide to understanding decision bias: A contribution to the favorite‐longshot bias debate

“…The methodology employed in Bruce and Johnson (2000) was also used to analyze the 2004 data and yielded remarkably similar results to those reported in the earlier paper (see Table 2), in terms of the predicted winning probabilities for horses in various odds ranges. Table 2.…”

“…Table 2. A comparison of predicted winning probabilities (arising from pari-mutuel and bookmaker odds) between those produced in Bruce and Johnson (2000) and those produced employing the Bruce and Johnson's (2000) Taken together, comparisons of the results of the application of the methodology suggested here with that employed in Bruce and Johnson (2000) confirm our decision to account for within-race competition using a CL model in this study; it is through this medium that the true incidence of the bias is unmasked.…”

“…As indicated above, previous research suggests that the FLB has been persistent across time and this is confirmed by comparing the results (presented below) obtained from analyzing 1996 data from the UK bookmaker and pari-mutuel betting markets, employed originally in Bruce and Johnson (2000), with the results of the current study. Consequently, the 2004 data employed in this study is regarded as a random sample drawn from all races run in the UK over recent years.…”

“…The value of the proposed technique for assessing the true degree of FLB in a market is illustrated by a reworking of the 1996 UK horserace data (19 396 horses, in 2109 races) employed in Bruce and Johnson (2000). They explored deviations of actual winning probability from those implied in the odds without directly accounting for within-race competition and, as a result, they detected no significant bias in the parimutuel market.…”

Exploring Decision Makers’ Use of Price Information in a Speculative Market

“…The remaining three predictors in the model were included because previous literature suggests that they may have some influence on a horse's probability of success. First, a number of studies have demonstrated a close correspondence between probabilities implied by closing odds and winning probabilities (e.g., Bruce and Johnson 2000). The closing odds for horse j in race i imply a "track probability" of winning q i j via the relationship…”

Complexity as a guide to understanding decision bias: A contribution to the favorite‐longshot bias debate

“…The methodology employed in Bruce and Johnson (2000) was also used to analyze the 2004 data and yielded remarkably similar results to those reported in the earlier paper (see Table 2), in terms of the predicted winning probabilities for horses in various odds ranges. Table 2.…”

“…Table 2. A comparison of predicted winning probabilities (arising from pari-mutuel and bookmaker odds) between those produced in Bruce and Johnson (2000) and those produced employing the Bruce and Johnson's (2000) Taken together, comparisons of the results of the application of the methodology suggested here with that employed in Bruce and Johnson (2000) confirm our decision to account for within-race competition using a CL model in this study; it is through this medium that the true incidence of the bias is unmasked.…”

“…As indicated above, previous research suggests that the FLB has been persistent across time and this is confirmed by comparing the results (presented below) obtained from analyzing 1996 data from the UK bookmaker and pari-mutuel betting markets, employed originally in Bruce and Johnson (2000), with the results of the current study. Consequently, the 2004 data employed in this study is regarded as a random sample drawn from all races run in the UK over recent years.…”

“…The value of the proposed technique for assessing the true degree of FLB in a market is illustrated by a reworking of the 1996 UK horserace data (19 396 horses, in 2109 races) employed in Bruce and Johnson (2000). They explored deviations of actual winning probability from those implied in the odds without directly accounting for within-race competition and, as a result, they detected no significant bias in the parimutuel market.…”

Exploring Decision Makers’ Use of Price Information in a Speculative Market

“…The remaining three predictors in the model were included because previous literature suggests that they may have some influence on a horse's probability of success. First, a number of studies have demonstrated a close correspondence between probabilities implied by closing odds and winning probabilities (e.g., Bruce and Johnson 2000). The closing odds for horse j in race i imply a "track probability" of winning q i j via the relationship…”

Complexity as a guide to understanding decision bias: A contribution to the favorite‐longshot bias debate

“…The methodology employed in Bruce and Johnson (2000) was also used to analyze the 2004 data and yielded remarkably similar results to those reported in the earlier paper (see Table 2), in terms of the predicted winning probabilities for horses in various odds ranges. Table 2.…”

“…Table 2. A comparison of predicted winning probabilities (arising from pari-mutuel and bookmaker odds) between those produced in Bruce and Johnson (2000) and those produced employing the Bruce and Johnson's (2000) Taken together, comparisons of the results of the application of the methodology suggested here with that employed in Bruce and Johnson (2000) confirm our decision to account for within-race competition using a CL model in this study; it is through this medium that the true incidence of the bias is unmasked.…”

“…As indicated above, previous research suggests that the FLB has been persistent across time and this is confirmed by comparing the results (presented below) obtained from analyzing 1996 data from the UK bookmaker and pari-mutuel betting markets, employed originally in Bruce and Johnson (2000), with the results of the current study. Consequently, the 2004 data employed in this study is regarded as a random sample drawn from all races run in the UK over recent years.…”

“…The value of the proposed technique for assessing the true degree of FLB in a market is illustrated by a reworking of the 1996 UK horserace data (19 396 horses, in 2109 races) employed in Bruce and Johnson (2000). They explored deviations of actual winning probability from those implied in the odds without directly accounting for within-race competition and, as a result, they detected no significant bias in the parimutuel market.…”

Exploring Decision Makers’ Use of Price Information in a Speculative Market

“…The remaining three predictors in the model were included because previous literature suggests that they may have some influence on a horse's probability of success. First, a number of studies have demonstrated a close correspondence between probabilities implied by closing odds and winning probabilities (e.g., Bruce and Johnson 2000). The closing odds for horse j in race i imply a "track probability" of winning q i j via the relationship…”