Decision-making in betting markets |
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Authors: | Leighton Vaughan Williams |
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Institution: | Nottingham Trent University, UK |
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Abstract: | The placing of a bet is a classic example of decision-making under uncertainty. A betting market is also an example of a simple financial market, but one which possesses the advantage that each bet is characterised by a well-defined end point at which it possesses a definite value, i.e. the amount won or lost. Leighton Vaughan Williams explains the implications for our understanding of economic decision-making of the observed tendency for the expected returns on bets to differ markedly at different odds levels. |
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