Publication

Estimating probability distributions by observing betting practices

Lynch, Caroline
; 
Barry, Daniel
Identifiers
http://hdl.handle.net/10379/12530
 https://doi.org/10.13025/27888
Publication Date
2007-12-27
Keywords
bookmaker, em algorithm, horse race, markov decision process
Type
Article
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Citation
Lynch, Caroline; Barry, Daniel (2007). Estimating probability distributions by observing betting practices. Communications in Statistics - Theory and Methods 37 (1), 8-17
Abstract
A bookmaker takes bets on a two-horse race, attempting to minimize expected loss over all possible outcomes of the race. Profits are controlled by manipulation of customer betting behavior; in order to do this, we need some information about the probability distribution which describes how the customers will bet. We examine what information initial customer betting behavior provides about this probability distribution, and consider how to use this to estimate the probability distribution for remaining customers.
Funder
Publisher
Informa UK Limited
Publisher DOI
Rights
Attribution-NonCommercial-NoDerivs 3.0 Ireland
cbn
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Externally hosted open access publications with University of Galway authors (2)