Introduction to Utility Preferences of Racetrack Bettors

AbstractRacetrack betting is a classic example of decision making under uncertainty. The options available to a bettor - they types of wagers possible - are clearly understood. A bettor's probabilities are, of course, only subjective, not objective. Considerable data is available to refine one's probabilities and the parimutuel method aggregates these individual assessments to arrive at the public's assessment which, as was discussed in the previous sections, roughly approximates objective probabilities. The papers in this section attempt to describe the risk-taking behavior of the representative bettor by evaluating this bettor's utility function and by comparing reactions to different wagers that have similar risk characteristics…