what you see depends on where you are standing

Opening Shots


RACE SELECTION BEST PRICE
13:30 Ayr Dick Datchery 12.0


Herding


Recent theoretical work in developmental psychology suggests that humans are predisposed to align their mental states with those of other individuals. The propensity in the betting markets to herd and to respond to information cascades ensures that most people are guilty of simply discounting their own private beliefs and trading on the back of somebody elses information. That is why significant mispricings can and do occur and why they can stay in place over extended periods of time - right up until the betting market on a particular event terminates (per the terrible television inspired gambles on the O'Brien trained Monday and the Saeed bin Suroor trained Benbatl - with the totally ridiculous comments of Kevin Blake particularly worthy of note ....Tell the viewers of ITV racing what they want to hear and you can be wrong indefinitely without sanction.)



Latent Thoughts





Nothing More Than A Kind Of Best Guess

Our priors contribute to the construction of a mental framework that we utilise for evidence gathering, both about ourselves and about the social environment that we exist in and that is unfolding around us. In that our priors are always subjective, drawn from associative memory and moulded by unconscious forces, the process of evidence gathering represents in effect, nothing more than a kind of best guess. The process becomes derailed because despite our best efforts we are not immune from biases: we wrongly assume, for example, that we are actually capable of bringing something new to the table; we assume that we are capable of reading the minds and intentions of others, and that we can tell the future. We also assume that we are capable of integrating rational and emotional thinking so as to reach decisions that are perfectly adapted to the context that we find ourselves in. The classical notion that most traders in betting markets are Bayesian agents who religiously convert their prior beliefs into posterior beliefs in accordance with Bayes’ rule has long been discredited. Rather, we now see them for what they are, as having heterogeneous beliefs and being imperfectly rational. Traders who are more analytically sophisticated, better educated or more numerate in their outlook are often more prone to making distorted inferences – rationalizing away new evidence and compartmentalizing knowledge to protect already held highly valued beliefs.


Show me a man who claims he is objective and I'll show you a man with illusions. Henry R. Luce



OutcomeImplied Probability
Trump44%
Biden56%

Source: Bettingmarket.Com Analysis. 25/09/2020.

Rose-Colored Glasses


As Justin Wolfers so brilliantly demonstrated during the 2016 US Election our subjective probabilities of outcomes are always inflated (or reduced) in direct proportion to the degree and extent to which we actually want the event under consideration to occur.