Submission Title
Session 1-2-F: Rationality and Risk Intelligence in Binary Betting
Presentation Type
Event
Location
Caesars Palace, Las Vegas Florentine III
Start Date
28-5-2013 10:30 AM
End Date
28-5-2013 12:00 PM
Disciplines
Economics | Gaming and Casino Operations Management | Mental and Social Health | Psychology | Public Affairs, Public Policy and Public Administration | Sociology | Statistics and Probability | Substance Abuse and Addiction
Abstract
We analyze 1.6 million binary bets on financial markets totaling $600 million in stakes, placed by 21,000 bettors at a large Internet betting site. The data set is unusually large and complete, plus has one additional important advantage: we can obtain objective independent estimates of the ex ante probability of winning each bet, using data from financial markets. This allows us to distinguish bettor profit due to superior prediction of financial events from bettor profit due to exploiting ex ante favorable odds situations. We focus on the degree or type of skill possessed by bettors (if any), and the amount of rationality and risk intelligence demonstrated in exploiting that skill.
Included in
Economics Commons, Gaming and Casino Operations Management Commons, Psychology Commons, Public Affairs, Public Policy and Public Administration Commons, Sociology Commons, Statistics and Probability Commons, Substance Abuse and Addiction Commons
Session 1-2-F: Rationality and Risk Intelligence in Binary Betting
Caesars Palace, Las Vegas Florentine III
We analyze 1.6 million binary bets on financial markets totaling $600 million in stakes, placed by 21,000 bettors at a large Internet betting site. The data set is unusually large and complete, plus has one additional important advantage: we can obtain objective independent estimates of the ex ante probability of winning each bet, using data from financial markets. This allows us to distinguish bettor profit due to superior prediction of financial events from bettor profit due to exploiting ex ante favorable odds situations. We focus on the degree or type of skill possessed by bettors (if any), and the amount of rationality and risk intelligence demonstrated in exploiting that skill.
Comments
Moderator: Douglas Walker
Session 1-2-F Risk, Rationality, and Investment
File: 24 PowerPoint slides
Attached file: Paper