Toward an explanation of the Favourite-Longshot bias: a decision-making perspective

This paper seeks to offer new insights into the behavioral origins of the 'favourite-longshot' bias - an established feature of betting markets, whereby longshots win less often than the subjective probabilities imply and favourites more often. This study analyses a new data source which offers detailed information for a large sample of recent UK horseraces on decision-making behavior within the parimutuel and the parallel bookmaker-based betting markets