MARKET ENFORCED INFORMATION ASYMMETRY: A STUDY OF CLAIMING RACES

This is a study of complementary markets. The race track polices the betting market with information revealed in a ‘claiming horse’ market. This policing reduces the adverse consequences of asymmetric information: experts in identifying horses and fraud are deterred from biasing betting odds against...

Full description

Saved in:
Bibliographic Details
Published inEconomic inquiry Vol. 24; no. 2; pp. 271 - 291
Main Author HALL, CHRISTOPHER D.
Format Journal Article
LanguageEnglish
Published Oxford, UK Blackwell Publishing Ltd 01.04.1986
Oxford University Press for the Western Economic Association International, etc
Western Economic Association
Subjects
Claims
Costs
Economic theory
Fraud
Horses
Information
Legalized gambling
Prices
Races
Studies
Online AccessGet full text

Cover

More Information
Summary:This is a study of complementary markets. The race track polices the betting market with information revealed in a ‘claiming horse’ market. This policing reduces the adverse consequences of asymmetric information: experts in identifying horses and fraud are deterred from biasing betting odds against bettors at large. Consequently, bettors specialize in evaluating published race information. This ‘monitoring’ theory is compared to a competing theory of claim races as a self‐assessed horse market. Parametric data is used to evaluate each theory. Institutional details also provide a test of each theory.
Bibliography:ArticleID:ECIN271
istex:B0FFD6EEBD95864E248C147613ED1C62524406AF
ark:/67375/WNG-7FB1DF6K-C
University of Hong Kong and Simon Fraser University. Steve Easton provided many valuable comments, as did an anonymous referee. Thanks are also extended to Yoram Barzel, Kelly Busche, John Chant, Steven Cheung, Harold Demsetz, Elizabeth Granitz, Denise Martin, Clyde Reed, and to Donna Wilson for their comments.
ISSN:0095-2583
1465-7295
DOI:10.1111/j.1465-7295.1986.tb01810.x