Koch, Alexander K.; Shing, Hui-Fai - In: Journal of Prediction Markets 2 (2008) 2, pp. 29-50
A widely documented empirical regularity in gambling markets is that bets on high probability events (a race won by a “favourite”) have higher expected returns than bets on low probability events (a “longshot” wins). Such favourite-longshot (FL) biases however appear to be more severe...