experimentally test three competing theories of GF and HHF: probability bias, randomized choice, and bounded rationality. We find … the classical method suggests about 51% (48%). We show that probability bias, randomized choice, and bounded rationality …

misperceptions of probability drive the favorite-longshot bias, as suggested by Prospect Theory. -- Pricing under risk ; probability …The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates … weighting ; compound lotteries ; favorite-longshot bias …