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Is Racetrack Betting on Exactas Efficient?

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  • Dolbear, F Trenery, Jr

Abstract

A test of the efficiency of an exotic racetrack betting market--the exacta--is examined. Although a prior study found that the exacta failed the efficiency test, that result is sho wn here to depend on a biased estimation procedure. Similarly, this bia sed estimation procedure can vitiate a conclusion that exacta markets ar e attracting "smart money" (holders of insider information) in an attempt to avoid revealing their information to the betting public. Copyright 1993 by The London School of Economics and Political Science.

Suggested Citation

  • Dolbear, F Trenery, Jr, 1993. "Is Racetrack Betting on Exactas Efficient?," Economica, London School of Economics and Political Science, vol. 60(237), pages 105-111, February.
  • Handle: RePEc:bla:econom:v:60:y:1993:i:237:p:105-11
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    Cited by:

    1. Erik Snowberg & Justin Wolfers, 2010. "Explaining the Favorite-Long Shot Bias: Is it Risk-Love or Misperceptions?," Journal of Political Economy, University of Chicago Press, pages 723-746.
    2. Joseph Golec & Maurry Tamarkin, 1998. "Bettors Love Skewness, Not Risk, at the Horse Track," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 205-225, February.

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