Ten Dollars on Informational Asymmetries to Win, and Why People Bet on Horse Races
Gambling is risky by nature. In a pari-mutuel betting system with an authority removing a portion of the bets from the payoffs, one faces depressingly negative expected values. With this understanding, it is unclear why people would chose to bet at all on horse races. The truth of the matter is that people gain an understanding of expected values depending on how well they interpret statistics and signals, and informational asymmetries will eventually lead to net winners and net losers.
Date of Completion
Griggs, Galen, "Ten Dollars on Informational Asymmetries to Win, and Why People Bet on Horse Races" (2006). Economics Theses. 16.