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The impact of evolving and sporadically changing information on subjective probability judgements in a market for state contingent claims

Johnson, J.E.V., Bozzetto, J.-F. and O'Brien, R. (2006) The impact of evolving and sporadically changing information on subjective probability judgements in a market for state contingent claims At Statistics and Gambling Meeting, The Royal Statistical Society. 07 Nov 2006.

Record type: Conference or Workshop Item (Paper)

Abstract

This paper reports the results of a field study examining the ability of decision-makers to effectively account for evolving and sporadically changing information in their subjective probability judgments. The research is conducted in a naturalistic setting where it is possible to measure the extent to which dynamic information is employed in probability judgments: the horserace betting market. The study explores the subjective probabilities of bettors concerning 16,344 horses running in 1,671 races. The results suggest that bettors are skilled in discounting evolving and sporadically changing information in their probability judgments. They appear to achieve this by adopting effective heuristics to simplify their dynamic information environment and by learning to improve their judgments using outcome feedback. A number of task, individual and environment related factors which help bettors' effectively handle sporadically changing information, and which could be of value to decision-makers in other areas of human endeavor, are discussed.

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More information

Published date: 2006
Venue - Dates: Statistics and Gambling Meeting, The Royal Statistical Society, 2006-11-07 - 2006-11-07

Identifiers

Local EPrints ID: 42613
URI: http://eprints.soton.ac.uk/id/eprint/42613
PURE UUID: de8a7c7e-76a7-4515-8ff8-a8a62fff8e6c

Catalogue record

Date deposited: 18 Dec 2006
Last modified: 17 Jul 2017 15:21

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Contributors

Author: J.E.V. Johnson
Author: J.-F. Bozzetto
Author: R. O'Brien

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