Power law distribution of dividends in horse races
Department of Physics of Complex Systems,
Weizmann Institute of Science Rehovot 76100, Israel
Accepted: 3 November 2000
We discovered that the distribution of dividends in Korean horse races follows a power law. A simple model of betting is proposed, which reproduces the observed distribution. The model provides a mechanism to arrive at the true underlying winning probabilities, which are initially unknown, in a self-organized collective fashion, through the dynamic process of betting. Numerical simulations yield excellent agreement with the empirical data.
PACS: 02.50.-r – Probability theory, stochastic processes, and statistics / 05.40.-a – Fluctuation phenomena, random processes, noise and Brownian motion / 89.90.+n – Other topics of general interest to physicists
© EDP Sciences, 2001