New study on bot bettors just out

[Boscar Obarra]

http://phys.org/news/2016-05-high-rolling-quants-horse-friends-foes.html

Haven\'t had a chance to wade thought it , but should be interesting.

Hey Mathcapper, there\'s a TON of those impossible to fathom formulas in the paper, have at it!

[Mathcapper]

Boscar Obarra Wrote:
-------------------------------------------------------
> Hey Mathcapper, there\'s a TON of those impossible
> to fathom formulas in the paper, have at it!

Yeah, those Nash equilibrium formulas are pretty heavy stuff. This is the first time I\'ve seen game theory applied to horse racing, but it makes perfect sense since it is of course a zero sum game.

As far as optimum strategies based on the Nash equilibrium go, all I know is that you should always ignore the blonde.

SSRN btw is a great resource for new quantitative research papers. I use it all the time for my quantitative factor-based investing work.

[Leamas57]

I thought about how someone might apply game theory for trying to determine pace in a large field. We all already know that larger fields distort pace, but as with the Derby, there were only a few serious pace players (some those who weren\'t chose to try and get closer though) so the \"game\" had fewer decision makers. In game theory, you can have coalitions, too, as with a trainer with two entries or jockeys who are in cahoots.

With this Preakness race, though, the favorite has to decide how slow to go to avoid a pace collapse before risking having the race stolen on the front.  

It\'s not a zero-sum game in that some awards are made for placing, but the equilibrium (the most likely outcome for pace), I believe, is when everyone feels they have the best chance.

Leamas

[Dick Powell]

I have always described horse racing as a negative sum game because of the takeout.

[miff]

Finally someone who gets it. Zero sum game??? Where\'s the $2 billion chop that does not go back to the players each year?

[Dick Powell]

Four people sit down to play poker against each other; that\'s a zero sum  game.
Four people sit down to play poker and the house rakes the pot; that\'s a negative sum game.
Four people sit down to play poker, Prop Joe tips Omar as to where the game is and he shows up and robs everyone; that\'s a positive sum game - for Omar. Apologies to anyone that does not watch The Wire.