Favorite–longshot bias in pari-mutuel betting: An evolutionary explanation
نویسندگان
چکیده
منابع مشابه
The Pari-Mutuel Model
We explore generalizations of the pari-mutuel model (PMM), a formalization of an intuitive way of assessing an upper probability from a precise one. We discuss a naive extension of the PMM considered in insurance and generalize the natural extension of the PMM introduced by P. Walley and other related formulae. The results are subsequently given a risk measurement interpretation: in particular ...
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Recently, there has been an increase in the usage of centrally managed markets which are run by some form of pari-mutuel mechanism. A parimutuel mechanism is characterized by the ability to shield the market organizer from financial risk by paying the winners from the stakes of the losers. The recent introduction of new, modified pari-mutuel methods has spurred the growth of prediction markets ...
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We explore generalizations of the pari-mutuel model (PMM), a formalization of an intuitive way of assessing an upper probability from a precise one. We discuss a naive extension of the PMM considered in insurance, compare the PMM with a related model, the Total Variation Model, and generalize the natural extension of the PMM introduced by P. Walley and other pertained formulae. The results are ...
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A dynamic pari-mutuel market (DPM) is a hybrid between a continuous double auction (CDA) and a pari-mutuel market. Like a CDA, a DPM incentivizes traders to reveal their information early. Like a pari-mutuel market, a DPM has infinite liquidity, allowing trades at any time. In this paper, we examine empirical questions related to DPMs: Do prices in DPMs predict events of interests? How do trade...
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We study a mechanism that resembles a market. There are two main approaches to doing that. One uses a double-auction type of mechanism; the other, which is studied here, uses a Cournot quantity type of mechanism. Our mechanism has two stages and is inspired by pari-mutuel betting. The second stage resembles the determination of final odds and payoffs in pari-mutuel betting. The first stage is a...
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ژورنال
عنوان ژورنال: Journal of Economic Behavior & Organization
سال: 2017
ISSN: 0167-2681
DOI: 10.1016/j.jebo.2017.05.001