Abstract
The analysis examines the wagering behavior of the “uninformed” bettor. Using data from a second tier racetrack, the high correlation between subjective and objective probabilities suggests an efficient win pool. However, the results fail to demonstrate the public 's tendency to underbet favorites and overbet longshots. Employing computer intensive statistical methods, a second part of the analysis suggests that mispricing does exist in the place and show pooh, although the size of these inefficiencies may be of small economic consequence. Taken as a whole, the results of a small, start-up track mirror those found in earlier studies of major racetracks and support an earlier conjecture that the fast, repetitive feedback in horserace wagering facilitates learning.
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