I’m presenting a seminar at the University of Sydney tomorrow afternoon. It’s looking at a specific aspect of election betting markets – whether they seem to suffer from the same favourite-longshot bias seen in horserace betting markets (the expected payout from a day at the races is always negative, but if you want to minimise your expected losses, bet favourites). If the same applies to prediction markets, it would have implications for how we interpret their prices.
Is there a favorite-longshot bias in election prediction markets? (with Justin Wolfers and Eric Zitzewitz)
2.30-3.30pm, Tue 16 Oct
Room 214, new Economics and Business building (opposite the Sports Union swimming pool)
University of Sydney
It’s work in progress, so I won’t have a paper to distribute tomorrow. But if you’re generally interested in prediction markets, I’ve put a bunch of election betting links on my academic website.
I always understood that studies showed that very short-priced favourites at the races yield a positive expected payout – but of course they’re rare.
I wish I could be there for that, Andrew – sounds most interesting. We certainly look forward to having a look at the work when released.
Betting the favourite for a place in the Melbourne Cup has been a winning strategy over the past several decades. It has been for me or perhaps I just started at the right time
damn now I have just destroyed my advantage considering the number of people who read Andrew’s blog 🙂