Comments on: Thaler’s Stylized Facts on Horsetrack Betting http://www.discusseconomics.com/behavioral-economics/thalers-stylized-facts-on-horsetrack-betting/ Join the conversation on a variety of economic and finance discussions. Sun, 05 Feb 2012 11:15:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Shane Curran http://www.discusseconomics.com/behavioral-economics/thalers-stylized-facts-on-horsetrack-betting/comment-page-1/#comment-31805 Shane Curran Mon, 21 Mar 2011 18:30:18 +0000 http://www.discusseconomics.com/articles/behavioral-economics/thalers-stylized-facts-on-horsetrack-betting/#comment-31805 The common sense explanation for the third fact is that people do not get as much utility from taking money from a friend as they do taking money from the track. Another reason friends may not bet against each other is that they might feel obligated to repay the loser (for example buy them a drink because they lost money) in some way or have an inclination to not take all of the money that was bet. Another problem especially when we talk about horse racing is that the bundle of bets an individual wants to make may not be available within the group or that there is a cost to organizing the bet within the preferences of the individuals in the group. Think about how complicated it would be to organize a trifecta bet between a group of four individuals. The common sense explanation for the third fact is that people do not get as much utility from taking money from a friend as they do taking money from the track. Another reason friends may not bet against each other is that they might feel obligated to repay the loser (for example buy them a drink because they lost money) in some way or have an inclination to not take all of the money that was bet. Another problem especially when we talk about horse racing is that the bundle of bets an individual wants to make may not be available within the group or that there is a cost to organizing the bet within the preferences of the individuals in the group. Think about how complicated it would be to organize a trifecta bet between a group of four individuals.

]]>