Statistics and Horse Race Betting: Favorites vs. Longshots

A strong motivation for engaging in statistics are bets of all kinds. They involve money, chances, and speculating on potentially recurrent events. Especially horse race betting is an interesting research object since individual decisions in a real-world situation can be observed and, hence, analyzed in relation to the actual outcomes of the races. Therefore, betting is a kind of field experiment with many participants, in contrast to lab experiments where only a few participants make choices in controlled designs.