Standard parametric specifications of Cumulative Prospect theory (CPT) can explain why agents bet on longshots at actuarially unfair odds. However, the standard specification of CPT cannot explain why people might bet on more favoured outcomes, where by construction the greatest volume of money...

Bookmakers practise a type of product bundling. To bet a horse for a place a punter has to bet an equal amount for a win. The returns to the place component of the bet are determined by a rule of thumb. This paper examines whether the product bundling negates a betting strategy that endeavours...