Contents -- Preface to 2008 Edition -- Preface in 1994 Edition -- List of Contributors -- Acknowledgments -- Introduction -- PART I. PSYCHOLOGICAL STUDIES -- Introduction to Psychological Studies D.B. Hausch, V.S.Y. Lo and W.T. Ziemba -- Odds Adjustments by American Horse-Race Bettors R.M. Griffith -- SUMMARY AND CONCLUSIONS -- Stability of Choices among Uncertain Alternatives W.H. McGlothlin -- PROBLEM -- PROCEDURE -- RESULTS -- Discussion -- SUMMARY -- A Footnote on Horse Race Betting R.M. Griffith -- Literature Cited -- Biases in Betting: An Application of Laboratory Findings M.A. Metzger -- METHOD -- RESULTS -- DISCUSSION -- REFERENCES -- PART 11. UTILITY PREFERENCES OF RACETRACK BETTORS -- Introduction to Utility Preferences of Racetrack Bettors D.B. Hausch, V.S.Y. Lo and W.T. Zieniba -- On the Robustness of the Arrow-Pratt Risk Aversion Measure J.G. Kallberg and W.T. Ziemba -- References -- Utility Analysis and Group Behavior: An Empirical Study M. Weitzman -- I. INTRODUCTION -- 11. THE EXPECTED-UTILITY IlYPOTHESIS -- 111. EXPERIMENTAL BACKGROUND: THE RACE TRACK AND PARIMWTUEL BETTING -- IV. THE EXPERIMENTAL PROBABILITY CURVE -- V. FORMULATION OF THE MODEL MR. AVMART -- VI. AVMART'S INDIFFERENCE CURVE -- VII. AVMART'S UTILITY OF MONEY CURVE -- VIII. CONCLUSION -- Gambling and Rationality R.N. Rosett -- I. INTRODUCTION -- II. PARI-MUTUELBETTING -- III. BETTING COMBINATIONS -- Iv. THE TEEORETICAL RELATION BE- TWEEN RETURNS AND PROBA- BILITIES -- V. RACE-TRACK DATA -- VI. THE EMPIRICAL RELATION BETWEEN RETURN AND THE PROBABILITY OF WINNING -- VII. CONCLUSIONS -- APPENDIX A -- APPENDIX B -- APPENDIX C -- Probability and Utility Estimates for Racetrack Bettors M.M. Ali -- I. Probability Estimates -- 11. Theoretical Explanation of the Differences between Subjective and Objective Probabilities -- 111. Risk Attitudes -- IV. Conclusion -- References.

PART 111. ECONOMIC AND MATHEMATICAL INSIGHTS -- Introduction to Economic and Mathematical Insights D.B. Hausch, V.S.Y. Lo and W.T. Ziemba -- Optimal Horse Race Bets R. Isaacs -- 1. Introduction. -- 2. The problem. -- 3. The solution. -- 4. Some ramifications. -- Concavity Properties of Racetrack Betting Models J.G. Kallberg and W.T. Ziemba -- REFERENCES -- Optimal Bets in Pari-Mutuel Systems N. Levin -- 1. Introduction -- 2 . The General Deterministic Model -- 3 . Linear utility ** -- 4 . Logarithmic utility -- 5. The stochastic model -- 6 . Conclusion -- Acknowledgment -- Growth versus Security in Dynamic Investment Analysis L.C. MacLean, W.T. Ziemba and G. Blazenko -- I . The Basic Investment Problem -- 1.1. Measures of Growth -- I .2. Measures of Security -- 2. Computation of Measures -- 3. Effective Growth-security Tradeoff -- 4. Applications -- 4. I . Blackjack: ( 6, p ) -- 4.2. Horseracing: ( p r , y,) -- 4.3. Lotto Games: (q, (3) -- 4.4. Playing the Turn ofthe Year- Effect with Iiides Furures: ( 4 , p ) -- References -- Searching for Positive Returns at the Track: A Multinomial Logit Model for Handicapping Horse Races R.N. Bolton and R.G. Chapman -- lntroduction -- The Pari-Mutuel System -- A Statistical Model to Estimate Winning Probabilities -- Estimating a Multinomial Logit Model of the Horse Race Process -- Analysis of Wagering Systems: Searching for Positive Returns at the Track -- Concluding Remarks -- References -- Still Searching for Positive Returns at the Track: Empirical Results From 2,000 Hong Kong Races R.G. Chapman -- Abstract -- Introduction -- The Hong Kong Database -- Multinomial Logit Handicapping Model Results -- Holdout Sample Predictions of Wagering Results -- Extending Fundamental Modeling: Does The Public Have Special Insight? -- Concluding Remarks -- References.

Computer Based Horse Race Handicapping and Wagering Systems: A Report W. Benter -- INTRODUCTION -- FEATURES OF THE COMPUTER HANDICAPPING APPROACH -- HANDICAPPING MODEL DEVELOPMENT -- CREATING UNBIASED PROBABILITY ESTIMATES -- ASSESSING THE VALUE OF A HANDICAPPING MODEL -- WAGERING STRATEGY -- FEASIBILITY -- RESULTS -- CONCLUSION -- APPENDIX -- HANDICAPPING REFERENCES' -- REFERENCES -- An Empirical Cross-Validation of Alternative Classification Strategies Applied to Harness Racing Data for Win Bets L.H. Ludlow -- ABSTRACT -- INTRODUCTION -- METHOD -- RESULTS -- DISCUSSION -- REFERENCES -- Assigning Probabilities to the Outcomes of Multi-Entry Competitions D.A. Harville -- I . INTRODUCTION -- 2. RESULTS -- 3. APPLICATION -- 1. APPLICATION OF THEORETICAL RESULTS TO THIRD RACE OF SEPTEMBER 6, 1971, AT RIVER DOWNS RACE TRACK -- 2. FREQUENCY OF WINNING-ACTUAL VS. THEORETICAL -- 3. FREQUENCY OF FINISHING SECOND- ACTUAL VS. THEORETICAL -- 4. FREQUENCY OF FINISHING THIRD- ACTUAL VS. THEORETICAL -- 5. FREQUENCY OF PLACING-ACTUAL VS. THEORETICAL -- 6. FREQUENCY OF SHOWING-ACTUAL VS. THEORETICAL -- 7. PAYOFFS ON PLACE AND SHOW BETS- ACTUAL VS. THEORETICAL -- REFERENCE -- Permutation Probabilities as Models for Horse Races R.J. Henery -- 1. INTRODUCTION -- 2. STOCHASTIC ORDERING OF PERMUTATIONS -- 3. ORDER STATISTICS MODELS -- 3. I Shifted Distributions -- 4. APPROXIMATE PROBABILITIES FOR THE NORMAL CASE -- REFERENCES -- Estimating the Probabilities of the Outcomes of a Horse Race (Alternatives to the Harville Formulas) H.S. Stern -- 1. Introduction -- 2. The racetrack betting market -- 3. The Harville Formulas -- 4. Alternatives to the Harville formulas -- 5. Comparing the models -- 6. Conclusions -- References -- Application of Running Time Distribution Models in Japan V.S.Y. Lo -- I. Introduction -- 11. Fitting the Stern model.

111, A theoretical comparison between Harville and Stern -- IV. Conclusion -- References -- PART IV. EFFICIENCY OF WIN MARKETS AND THE FAVORITE-LONGSHOT BIAS -- Introduction to the Efficiency of Win Markets and the Favorite-Longshot Bias D.B. Hausch, V.S.Y. Lo and W.T. Ziemba -- Anomalies - Parimutuel Betting Markets: Racetracks and Lotteries R. Thaler and W.T. Ziemba -- Introduction -- Racetrack Betting Markets -- Betting Strategies -- Lotto Games -- Commentary -- Racetrack betting -- Lotteries -- References -- Horse Racing: Testing the Efficient Markets Model W.W. Snyder -- I. PARIMUTUEL BETTING -- 11. THE WEAK FORM -- 111. THE SEMI-STRONG FORM -- IV. THE STRONG FORM -- V. CONCLUSION -- REFERENCES -- Back on the Track with the Efficient Markets Hypothesis R.L. Loosey and J.C. Talbott, Jr. -- REFERENCES -- Subjective Information and Market Efficiency in a Betting Model S. Figlewski -- I. Introduction -- 11. The Model -- 111. The Results -- IV. Concluding Comments -- References -- Racetrack Betting and Informed Behavior P. Asch, B.G. Malkiel and R.E. Quandt -- 1. Introduction -- 2. Data and definitions -- 2.1. The data set -- 2.2. Some definitions -- 3. Some results -- 4. Conclusions -- References -- Applications of Logit Models in Racetrack Data V.S.Y. Lo -- I. Introduction -- 11. Logit model for win bet analysis -- 111. Illustrations of the logit model -- IV. Concluding remarks -- References -- Betting and Equilibrium R.E. Quandt -- I. INTRODUCTION -- 11. THE EFFICIENT Locus -- 111. CONCLUSION -- REFERENCES -- Differences of Opinion at the Racetrack S.R. Blough -- 1. Introduction -- 2. The Horseracing Market -- 2.1 Behavior of Bettors -- 2.2 Determination of Market Odds -- 2.3 Track Take and Optimal Bets -- 3. Races with 2 Horses -- 4. Races with J Horses -- 4.1 Risk Loving with Homogeneous Beliefs.

4.2 Heterogeneous Beliefs with Risk Neutral Bettors -- 4.3 Risk Loving Bettors with Heterogeneous Beliefs -- 5. Illustration with Log-Normal Distribution -- 6. Estimation Technique -- 7. Description of Data -- 8. Results -- 9. Conclusion -- 10. References -- Prices of State Contingent Claims with Insider Traders, and the Favourite-Longshot Bias H.S. Shin -- I. T H E MODEL -- 11. DERIVATION OF EQUILIBRIUM PRICES -- 111. AMOREGENERAL ARGUMENT -- I V . CONCLUDING REMARKS -- APPENDIX -- REFERENCE -- PART V. PRICES VERSUS HANDICAPPING: PLACE AND SHOW ANOMALIES -- Introduction to Prices versus Handicapping: Place and Show Anomalies D.B. Hausch, V.S.Y. Lo and W.T. Ziemba -- Market Efficiency in Racetrack Betting P. Asch, B.G. Malkiel and R.E. Quandt -- I. Introduction -- 11. Data and Definitions -- III. Models and Results -- IV. Conclusions -- References -- Market Efficiency in Racetrack Betting: Further Evidence and a Correction P. Asch, B.G. Malkiel and R.E. Quandt -- References -- Efficiency of the Market for Racetrack Betting <- D.B. Hausch, W.T. Ziemba and M.R. Rubinstein -- 1. The Racetrack Market -- 2. Previous Work on Racetrack Efficiency -- 3. ProposedTest -- 4. A Betting Model -- 5. Making the System Operational -- 6. Implementation and Reliability of the System -- References -- Transactions Costs, Extent of Inefficiencies, Entries and Multiple Wagers in a Racetrack Betting Model D.B. Hausch and W.T. Ziemba -- 1. The Racetrack Market -- 2. Racetrack Efficiency -- 3. Track Size and Wealth Level -- 4. Track Payback -- 5. Coupled Entries -- 5.1. Adjustments of EX: and EX -- for Coupled Entries -- 5.2. Adjustments ofp* and S * for Coupled Entries -- 6. Multiple Bets -- 7. Effect of the Track Take -- 8. Effect of Breakage -- 9. Results Using the Betting System -- 10. Will the Market Become Efficient? -- References.

Arbitrage Strategies for Cross-Track Betting on Major Horse Races D.B. Hausch and W.T. Ziemba.