Ziemba and Hausch have studied place and show betting at the racetrack and shown the occasional presence of positive expectation wagers. The technique uses information present at the racetrack (the amounts bet to win, place, and show on each horse) but not otherwise available. This paper examines data on past races and derives bounds on the percentages bet to win, place, and show for each of the first three finishing horses. Bounds on the estimated expected profit of Ziemba and Hausch (prior to the race) for a given bet is obtained. An example of the procedure is provided using past race results.
ASJC Scopus subject areas
- Modeling and Simulation
- Computer Science Applications