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Locks at the Racetrack

Author

Listed:
  • Donald B. Hausch

    (School of Business, University of Wisconsin, Madison, Wisconsin 53706)

  • William T. Ziemba

    (Faculty of Commerce and Business Administration, University of British Columbia, Vancouver, BC, Canada V6T 1Y8)

Abstract

The folklore of investment is replete with stories of arbitrage opportunities where profits can be made without risk. Such a “lock” exists at the racetrack. A simple model provides a criterion for existence of a set of bets to create the arbitrage plus the size of the various investments.

Suggested Citation

  • Donald B. Hausch & William T. Ziemba, 1990. "Locks at the Racetrack," Interfaces, INFORMS, vol. 20(3), pages 41-48, June.
    • Handle: RePEc:inm:orinte:v:20:y:1990:i:3:p:41-48
    DOI: 10.1287/inte.20.3.41
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    Citations

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    Cited by:

    1. Kazuki Okamoto & Mototsugu Fukushige, 2022. "Favourite–longshot biases in a pari-mutuel system without cross arbitrage," Economics Bulletin, AccessEcon, vol. 42(1), pages 203-207.
    2. Klaassen, Pieter, 1997. "Solving stochastic programming models for asset/liability management using iterative disaggregation," Serie Research Memoranda 0010, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Masahiro Ashiya, 2015. "Lock! Risk-Free Arbitrage in the Japanese Racetrack Betting Market," Journal of Sports Economics, , vol. 16(3), pages 322-330, April.

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