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Autoren: 
Bottazzi, Giulio
Giachini, Daniele
Datum: 
2018
Reihe/Nr.: 
LEM Working Paper Series 2018/08
Zusammenfassung: 
We consider a repeated betting market populated by two agents who wage on a binary event according to generic betting strategies. We derive new simple criteria to establish the relative wealth of the two agents in the long run, only based on the odds they believe fair and how much they would bet when the odds are equal to the ones the other agent believes fair. Using our criteria, we show that for a large class of betting strategies it is generically possible that the ultimate winner is only decided by luck. As an example, we apply our conditions to the case of CRRA betting.
Schlagwörter: 
Bounded Rationality
Betting Strategies
Market Selection
Recurrent Processes
Luck
JEL: 
C60
D53
G11
G12
Dokumentart: 
Working Paper

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