barry-dennis

Over the last few nights I have been burning the midnight oil.

Bath has a meeting this Saturday and I want to take my new gadget for a field trial.

Learning about its inner workings and configuration settings I’ve had to get to grips with Windows Mobile 6. Not easy for a die hard Nokia user!

I also wanted to remove all subjectivity from the tissue compilation process and it’s this task that has really burnt the candle at both ends to resolve the following dilemma

  • If I think a horse has a good chance winning what are the true odds?
  • If I think a horse has a good chance of losing what are the true odds?

In gambling and economics, the favourite-longshot bias is an observed phenomenon where on average, bettors tend to overvalue “long shots” and undervalue favourites. That is, in a horse race where one horse is given odds of 2 to 1, and another 100 to 1, the true odds might for example be 1.5 to 1 and 300 to 1 respectively. Betting on the “long shot” is therefore a much worse proposition than betting on the favourite. Various theories exist to explain why people willingly bet on such losing propositions, such as risk-taking behaviour, or simply inaccurate estimation.

Having read various research papers on the subject, it turns out that the process of odds compilation to account for a favourite longshot bias is not as simple as one might think; especially when one is trying remove the overround to squeeze all the runners into a 100% tissue.

With the aid of SP analysis tables, Microsoft Excel and my gizmo I’m going to experiment for a while.

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