Construct · 2 fields · 3 citations

favorite-longshot bias: one construct, many systems

One name. One construct. Different systems. One map.

● invariant · one bias, many betting markets Nearest construct by meaning·not indexed
same skew where long odds are pricedfavorite-longshotbias2 SYSTEMSFavorite–longshot biasGRIFFITH · 1949Longshot bias in marketsSNOWBERG & WOLFERS · 2010

Spokes are the systems the one construct recurs in; dashed arcs are shared lineage. Tap a field for its definition, unit, and measures.

1949Favorite–longshot bias2010Longshot bias in markets
2026

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Behavioral economics (racetrack)

Longshots are overbet, favorites underbet

In parimutuel horse-race betting, bettors systematically overbet longshots and underbet favorites, so low-probability horses return less than their odds imply while favorites return more than theirs. Griffith’s 1949 Odds adjustments by American horse-race bettors measured the pattern in American racetracks, and Thaler and Ziemba later catalogued it as one of the most durable anomalies in wagering markets. The referent is a systematic mispricing of win probability as a function of odds length, quantified by the gap between the return on favorites and on longshots.[1][2]

Unit
The gap in expected return between favorites and longshots
Recovery means
Not applicable
Measured by
Estimated from realized returns grouped by odds, comparing payouts against implied win probabilities

Finance and prediction markets

The same skew recurs wherever odds are priced

The same skew reappears in fixed-odds sports books, lotteries, and prediction and options markets wherever people price long-odds outcomes, with long shots overvalued relative to their true chances. Snowberg and Wolfers’ 2010 Explaining the favorite–long shot bias weighed the two leading accounts (bettors who genuinely love risk versus bettors who misperceive small probabilities) and found the misperception explanation fits the data better. It is the identical construct as the racetrack anomaly, realized across priced-odds markets and measured by the relation between price and realized frequency.[3]

Unit
The mispricing of low-probability outcomes relative to their frequency
Recovery means
Not applicable
Measured by
Assessed by comparing market-implied probabilities with realized outcome frequencies across the odds range

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References

  1. Griffith, R. M. (1949). Odds adjustments by American horse-race bettors. The American Journal of Psychology, 62(2), 290–294. https://doi.org/10.2307/1418469
  2. Thaler, R. H., & Ziemba, W. T. (1988). Anomalies: Parimutuel betting markets: Racetracks and lotteries. Journal of Economic Perspectives, 2(2), 161–174. https://doi.org/10.1257/jep.2.2.161
  3. Snowberg, E., & Wolfers, J. (2010). Explaining the favorite–long shot bias: Is it risk-love or misperceptions? Journal of Political Economy, 118(4), 723–746. https://doi.org/10.1086/655844

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