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Power-law distribution in Japanese racetrack betting

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  • Ichinomiya, Takashi

Abstract

Gambling is one of the basic economic activities that humans indulge in. An investigation of gambling activities provides deep insights into the economic actions of people and sheds lights on the study of econophysics. In this paper we present an analysis of the distribution of the final odds of the races organized by the Japan Racing Association. The distribution of the final odds Po(x) indicates a clear power-law Po(x)∝1/x, where x represents the final odds. This power-law can be explained on the basis of the assumption that every bettor bets his money on the horse that appears to be the strongest in a race.

Suggested Citation

  • Ichinomiya, Takashi, 2006. "Power-law distribution in Japanese racetrack betting," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 368(1), pages 207-213.
    • Handle: RePEc:eee:phsmap:v:368:y:2006:i:1:p:207-213
    DOI: 10.1016/j.physa.2005.12.027
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    References listed on IDEAS

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    1. Russo, Benjamin & Gandar, John M. & Zuber, Richard A., 1989. "Market rationality tests based on cross-equation restrictions," Journal of Monetary Economics, Elsevier, vol. 24(3), pages 455-470, November.
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