How does one effectively aggregate disparate pieces of information that are spread among many different individuals? In other words, how does one best access the ‘wisdom of the crowd’? Prediction markets, which are essentially speculative markets created for the purpose of aggregating information and making predictions, offer the answer to this question. Also included the Bill Benter 'What Are My Odds?' Presentation at ICCM in 2004. This paper aims to emphasize those aspects of computer handicapping which the author has found most important in practical application of such a system. This result can be interpreted as evidence of inefficiency in pari-mutuel racetrack wagering. The author reports significant positive results in five years of actual implementation of such a system. A logit-based technique and a corresponding heuristic measure of improvement are described for combining a fundamental handicapping model with the public's implied probability estimates. Data requirements, handicapping model development, wagering strategy, and feasibility are addressed.
This book examines the elements necessary for a practical and successful computerized horse race handicapping and wagering system. Close to a billion dollars later, he tells his system. The Gambler Who Cracked the Horse-Racing Code Bill Benter did the impossible: He wrote an algorithm that couldn't lose at the track.
