Sequential Parimutuel Betting in the Laboratory
AbstractThis paper investigates parimutuel betting in the laboratory. Our experimental design relies on a simple sequential betting game where equilibrium strategies are characterized according to objective probabilities, the number of bettors, and publicly observable odds. The empirically well-documented phenomenon referred to as the "favorite-longshot bias" is observed in two of our three treatments. We offer a theoretical explanation of the subjects' behavior which relies on rank-dependent expected utility and pessimistic expectations about future bets.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Risk and Uncertainty.
Volume (Year): 28 (2004)
Issue (Month): 2 (03)
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Web page: http://www.springerlink.com/link.asp?id=100299
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- Frederic Koessler & Ch. Noussair & A. Ziegelmeyer, 2005. "Individual Behavior and Beliefs in Experimental Parimutuel Betting Markets," THEMA Working Papers 2005-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Alessandro Innocenti & Tommaso Nannicini & Roberto Ricciuti, 2013.
"The Importance of Betting Early,"
502, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Alessandro Innocenti & Tommaso Nannicini & Roberto Ricciuti, 2012. "The Importance of Betting Early," Labsi Experimental Economics Laboratory University of Siena 037, University of Siena.
- Koessler, Frédéric & Noussair, Charles & Ziegelmeyer, Anthony, 2008.
"Parimutuel betting under asymmetric information,"
Journal of Mathematical Economics,
Elsevier, vol. 44(7-8), pages 733-744, July.
- Frederic Koessler & Anthony Ziegelmeyer, 2004. "Parimutuel Betting under Asymmetric Information," Papers on Strategic Interaction 2003-34, Max Planck Institute of Economics, Strategic Interaction Group.
- Frederic Koessler & Charles Noussair & Anthony Ziegelmeyer, 2006. "Parimutuel Betting under Asymmetric Information," Papers on Strategic Interaction 2006-05, Max Planck Institute of Economics, Strategic Interaction Group.
- Frédéric KOESSLER & Anthony ZIEGELMEYER, 2002. "Parimutuel Betting under Asymmetric Information," Working Papers of BETA 2002-17, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- FrÃ©dÃ©ric Koessler & Charles Noussair & Anthony Ziegelmeyer, 2007.
"Information Aggregation and Beliefs in Experimental Parimutuel Betting Markets,"
Papers on Strategic Interaction
2005-12, Max Planck Institute of Economics, Strategic Interaction Group.
- Frederic Koessler & Charles Noussair & Anthony Ziegelmeyer, 2007. "Information Aggregation and Beliefs in Experimental Parimutuel Betting Markets," Jena Economic Research Papers 2007-033, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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