A naturalistic study was employed to explore a new form of “basic anchoring.” In particular, we examined the degree to which decision makers in a financial market, the horserace betting market, anchored their probability judgments excessively on a factor present in the environment at the...

The paper presents a game-theoretical model to examine the equilibrium timing of insider trades in a market with a finite life span. An example of such a market is that for horse betting, where insiders must bet before the race or their information is of no value. We show that there is no...

Prediction markets have been shown to generate fairly accurate odds of various events occurring in the future. The forthcoming possibility of natural disasters provides, on occasion, an opportunity for a bet, yet no wide scale and accepted prediction market has arisen despite its obvious...

There have been many attempts, theoretical and empirical, to explain the persistence of a favorite-longshot bias in various horse betting markets. Most recently, Snowberg and Wolfers (2010) have shown that the data for the US markets support a “misperceptions of probability” approach in line...

Standard methods to assess the statistical quality of econometric models implicitly assume there is only one person in the world, namely the forecaster with her model(s), and that there exists an objective and independent reality to which the model predictions may be compared. However, on many...