Time to Unbridle U.S. Thoroughbred Racetracks? Lessons from Australian Bookies

Moul, Charles C.; Keller, Joseph M. G.

doi:10.1007/s11151-014-9418-z

Cited by 4 publications

(1 citation statement)

References 21 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The accuracy of forecasts derived from final prices in betting markets is sensitive to the level of uncertainty of the race outcomes (Moul and Keller, 2014). We believe that this uncertainty is likely to be linked to the variance of the preference variable probabilities across 8…”

Section: Preference Variable Variancementioning

confidence: 99%

Keeping a weather eye on prediction markets: The influence of environmental conditions on forecasting accuracy

Sperb

Sung

Johnson

et al. 2019

International Journal of Forecasting

View full text Add to dashboard Cite

Prediction markets are increasingly being embraced as a mechanism for eliciting and aggregating dispersed information and providing a means of deriving probabilistic forecasts of future uncertain events. The efficient market hypothesis postulates that prediction market prices should incorporate all information relevant to the performance of the contracts traded. This paper shows that this may not be the case in relation to information regarding environmental factors such as the weather and atmospheric conditions. In the context of horseracing betting markets, we demonstrate that even after the effects of these factors on the contestants (horses and jockeys) has been discounted, the accuracy of probabilities derived from market prices are systematically affected by the prevailing weather and atmospheric conditions. By correcting for this phenomenon, we show that significantly better forecasts can be derived from prediction markets, and that these have substantial economic value.

show abstract

Section: Preference Variable Variancementioning

confidence: 99%