A well-documented anomaly in racetrack betting is that the expected return per dollar bet on a horse increases with the probability of the horse winning. This so-called favorite- longshot bias is at odds with the presumptions of market efficiency. We show that the bias is consistent with betters...

In a college admission mechanism, students are often matched with colleges by using a noisy signal of their true abilities (e.g., their exam scores). The matching outcome thus may be imperfect in terms of ex-ante fairness, which suggests matching students with higher ability to better colleges....