Belmont Stakes anyone?

My Preakness picks were not as terrible as usual – I correctly had Afleet Alex to win, but missed my exactas. I guess they were good enough that some readers wanted my Belmont picks. Well, actually only one reader, but I’ll take that as a mandate. Anyway, I like Afleet Alex. I think he will be an odds-on favorite, like probably 3-5, although the morning line odds have him listed at 6-5. Even at odds as low as 3-5, I would bet him. Very heavy favorites, on average, are the highest return bets you can make in horse racing, although they still have negative expected value if you bet them all. Afleet Alex has low variance in his past performances, which in my experience, is a positive predictor of success for big favorites.

I definitely would not bet an exacta with Afleet Alex and Giacomo, even though they seem to be the two best horses in the race. Everyone and their brother will bet those two in an exacta and the payoff will be pathetic. If I were to bet an exacta box it would be Afleet Alex and Andromeda’s Hero who will be about 20-1.


Anonymous

So, how would you take home the most winnings? A little on many longshots? A lot on a few sure things?

Anonymous

Just to keep you honest, in addition to missing your exactas, you missed two out of three of your equally weighted win bets and the winner was the favorite.

Domo

the interactivity is amazing. you actually read the comments :)

anyway, there is an interesting point you make in your post that relates to something that interests me.

"everyone... will bet those two in an exacta and the payoff will be pathetic"
You're making an assumption about the group as a whole. Is there any good argument why the rest of the group is not using the same logic? (aside from saying that they haven't taken game theory class?)

You know of Nagel's work on Beauty Contests and in that setting the makeup of the group in terms of levels of rationality is crucial to the outcome of the game.

I've taken class with Arthur Robson and trying to look at it from his perspective there must be a bio/evolutionary reason for a particular level of rationality (and distribution within a population) to be stable/optimal.

There's been a lot of research in psychology on how many iterations can human brain handle and most people can't go above 3 or so. Intuitively, additional rationality requires more brain power and energy so one can't be completely rational (in game-theoretic sense). However, any one particular level, say 3, could also be outperformed by a lower level (we've all been in situations where you "think too much").

Now if I only had the math to write it as a paper...

Read more...

Steven D. Levitt

To anonymous,

You are right to point out that
I lost the other two win bets and
that Afleet Alex was the favorite.

Still, that is better than I usually do!

Anonymous

This is a while back, but I remember that you used the binomial to predict the probability of Oakland winning 97 games or more (or something like that) based on their performance in the first 35 or so games. Isn't the calculation flawed in the sense that baseball games can't be taken as independent events. Strength of schedule can vary from one 35 game stretch to another, some 35 game stretches may include more home games than others, and managers react to poor play with midseason personnel changes (and such changes can alter the ability of an individual team).

I guess your point was clear, though: Oakland probably won't win 97 games this year (If this was your point- It has been a couple weeks). Anyway, I enjoyed your book a great deal.

Shane

Anonymous

You do it again. WOW!

Anonymous

On a lark, I followed Professor Levitt's advice and bet his recommended exacta. I not only recovered the purchase price of "Freakonomics", but have enough money left over to cover my next 15 book purchases.

Anonymous

I'm surprised that Levitt's idolaters are not extolling his genius/luck at picking horses. Only two comments since his picks in the Belmont ran first and second. Apparently Freakonomics bloggers have better sense than to bet on horse races.

Chris Mercer

If this posts, I'll try again.

Chris Mercer

Not a comment on Belmont, but an appropriate place to make a comment. I thoroughly enjoyed your book, Freakonomics, and discussed it in a recent post on my blog, www.merceronvalue . I particularly liked your observations about real estate agents. I've made the same observation without your research proof -- and for investment bankers, as well. If you'd like a complimentary copy of my latest book, The Integrated Theory of Business Valuation, please let me know. Best of luck with your publishing ventures!

Domo

Anonymous said:
"... his genius/luck at picking horses."

Yet he wouldn't bet exacta. And another anonymous gets the money.

Anonymous

Great pick, Professor. This time you got it exactly right.

anna v.

Why don't economists vote?

I saw part of the recent Freakonomics Q&A on Washingtonpost.com and was surprised by the assertion that most economists don't bother to vote because it's just not worth it. After the extremely close results in the 2000 Gore vs. Bush race (not to mention the extremely close results in a lot of local government races), how can you justify this position? (And give me a break, with all the absentee and other voting options available nowadays, it's not a big expenditure of time or effort to cast a ballot.)

dan

What I'd like to know is why economists don't post responses to the comments that are left on their blogs. I suppose it's not worth their time and effort.

Anonymous

So, how would you take home the most winnings? A little on many longshots? A lot on a few sure things?

Anonymous

Just to keep you honest, in addition to missing your exactas, you missed two out of three of your equally weighted win bets and the winner was the favorite.

Domo

the interactivity is amazing. you actually read the comments :)

anyway, there is an interesting point you make in your post that relates to something that interests me.

"everyone... will bet those two in an exacta and the payoff will be pathetic"
You're making an assumption about the group as a whole. Is there any good argument why the rest of the group is not using the same logic? (aside from saying that they haven't taken game theory class?)

You know of Nagel's work on Beauty Contests and in that setting the makeup of the group in terms of levels of rationality is crucial to the outcome of the game.

I've taken class with Arthur Robson and trying to look at it from his perspective there must be a bio/evolutionary reason for a particular level of rationality (and distribution within a population) to be stable/optimal.

There's been a lot of research in psychology on how many iterations can human brain handle and most people can't go above 3 or so. Intuitively, additional rationality requires more brain power and energy so one can't be completely rational (in game-theoretic sense). However, any one particular level, say 3, could also be outperformed by a lower level (we've all been in situations where you "think too much").

Now if I only had the math to write it as a paper...

Read more...

Steven D. Levitt

To anonymous,

You are right to point out that
I lost the other two win bets and
that Afleet Alex was the favorite.

Still, that is better than I usually do!

Anonymous

This is a while back, but I remember that you used the binomial to predict the probability of Oakland winning 97 games or more (or something like that) based on their performance in the first 35 or so games. Isn't the calculation flawed in the sense that baseball games can't be taken as independent events. Strength of schedule can vary from one 35 game stretch to another, some 35 game stretches may include more home games than others, and managers react to poor play with midseason personnel changes (and such changes can alter the ability of an individual team).

I guess your point was clear, though: Oakland probably won't win 97 games this year (If this was your point- It has been a couple weeks). Anyway, I enjoyed your book a great deal.

Shane

Anonymous

You do it again. WOW!