Journal ArticleDOI
Subjective Information and Market Efficiency in a Betting Market
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TLDR
This paper examined the "market" for bets on thoroughbred horse races to determine whether the published forecasts of professional handicappers are completely discounted, and found that they do contain considerable information but that the track odds generated by betting discount almost all of it.Abstract:
Much of the information available to participants in speculative markets is in the nature of expert opinion, analysis, professional advice, and so on. Markets discount widely held factual information very well; this paper studies market efficiency with respect to subjective information. We examine the "market" for bets on thoroughbred horse races to determine whether the published forecasts of professional handicappers are completely discounted. A multinomial logit probability model is used to measure the information content of the forecasts, and we find that they do contain considerable information but that the track odds generated by betting discount almost all of it. Within the population of bettors, those betting at the track appear to discount the handicapper information fully, but those betting through New York's off-track betting system do not.read more
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Journal ArticleDOI
Noise Trader Risk in Financial Markets
TL;DR: In this article, the authors present a simple overlapping generations model of an asset market in which irrational noise traders with erroneous stochastic beliefs both affect prices and earn higher expected returns.
Posted Content
Positive Feedback Investment Strategies and Destabilizing Rational Speculation
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Journal ArticleDOI
Positive Feedback Investment Strategies and Destabilizing Rational Speculation
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The Stock Market Investments: Is the Market a Sideshow?
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Journal ArticleDOI
A Comparative Literature Survey of Islamic Finance and Banking
Tarek S. Zaher,M. Kabir Hassan +1 more
TL;DR: In this article, the authors provide a comprehensive comparative review of the literature on the Islamic financial system and introduce Islamic financial instruments in order to compare them to existing Western financial instruments and discuss the legal problems that investors in these instruments may encounter.
References
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Book
Risk, Uncertainty and Profit
TL;DR: In Risk, Uncertainty and Profit, Frank Knight explored the riddle of profitability in a competitive market profit should not be possible under competitive conditions, as the entry of new entrepreneurs would drive prices down and nullify margins, however evidence abounds of competitive yet profitable markets as mentioned in this paper.
Journal ArticleDOI
Probability and Utility Estimates for Racetrack Bettors
TL;DR: In this paper, subjectively a horse with a low winning probability is exaggerated and one with a high probability of winning is depressed, and subjectively, a risk lover tends to take more risk as his capital dwindles.
Journal ArticleDOI
Utility Analysis and Group Behavior: An Empirical Study
TL;DR: In this paper, the authors present the EXPECTED-UTILITY HYPOTHESISEXPERIMENTAL BACKGROUND: the RACE TRACK and PARIMUTUEL BETTING, and the Experimental ProBABILITY CURVEFORMULATION of the MODEL MR. AVMARTAVMART's INDIFFERENCE CURveAVMART's UTILITY OF MONEY CURVECONCLUSION