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The favourite-longshot bias isn’t going anywhere for certain markets

In gambling and economics, the favourite-longshot bias is an observed phenomenon where on average, bettors tend to overvalue "long shots" and undervalue favourites. That is, in a horse race where one horse is given odds of 2-to-1, and another 100-to-1, the true odds might for example be 1.5-to-1 and 300-to-1 respectively. Betting on the "long shot" is therefore a much worse proposition than betting on the favourite. Various theories exist to explain why people willingly bet on such losing propositions, such as risk-loving behavior, risk-averse behavior (1) or simply inaccurate estimation as presented by Sobel and Raines (2). In January 2016, a paper named "A Favorite-Longshot Bias in Fixed-Odds Betting Markets: Evidence from College Basketball and College Football" was published, authored by Jason P. Berkowitz, II...
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