Skip to main content
Article
Noise, Information, and the Favorite-Longshot Bias in Parimutuel Predictions
American Economic Journal: Microeconomics (2008)
  • Marco Ottaviani, Northwestern University
  • Peter Norman Sørensen
Abstract

A new model of parimutuel betting with private information provides a simple explanation for the favorite-longshot bias in terms of the amount of information relative to noise present in the market.

Publication Date
2008
Citation Information
Marco Ottaviani and Peter Norman Sørensen. "Noise, Information, and the Favorite-Longshot Bias in Parimutuel Predictions" American Economic Journal: Microeconomics (2008)
Available at: http://works.bepress.com/marco_ottaviani/8/