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A better probability model for the racetrack using Beyer speed numbers

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  • Rosenbloom, E. S.

Abstract

The dominant model in research related to the racetrack is that a horse's probability of winning a race is equal to the fraction of the win pool bet on that horse when adjusted for a favorite long-shot bias. A new model is developed using Beyer speed numbers to estimate the probability of a horse winning a race. An SPRT like test is developed to determine which of these two models is better. Although developed for the racetrack, this SPRT like test can be utilized whenever there are two models for assigning probabilities and the better model needs to be selected.

Suggested Citation

  • Rosenbloom, E. S., 2003. "A better probability model for the racetrack using Beyer speed numbers," Omega, Elsevier, vol. 31(5), pages 339-348, October.
    • Handle: RePEc:eee:jomega:v:31:y:2003:i:5:p:339-348
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    References listed on IDEAS

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    1. Bernard Rosner, 1975. "Optimal Allocation of Resources in a Pari-Mutuel Setting," Management Science, INFORMS, vol. 21(9), pages 997-1006, May.
    2. Donald B. Hausch & William T. Ziemba & Mark Rubinstein, 1981. "Efficiency of the Market for Racetrack Betting," Management Science, INFORMS, vol. 27(12), pages 1435-1452, December.
    3. Ruth N. Bolton & Randall G. Chapman, 2008. "Searching For Positive Returns At The Track: A Multinomial Logit Model For Handicapping Horse Races," World Scientific Book Chapters, in: Donald B Hausch & Victor SY Lo & William T Ziemba (ed.), Efficiency Of Racetrack Betting Markets, chapter 17, pages 151-171, World Scientific Publishing Co. Pte. Ltd..
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