Like Investing? Prob – “In any game where returns are highly volatile, and there is a reasonable expectation that skill plays a role, delusions of expertise may come into play,”
Think you’re an expert bettor? You’re probably wrong……the amount of wins required to show that one is doing better than chance is extremely high…
a gambler would have to place over 10,000 bets in individual races with net returns exceeding nine percent to be reasonably considered an expert bettor. This means that for the vast majority of players, their historic records or data provide surprisingly little information regarding their chances of making a positive return in the future.
….even sophisticated and rational gamblers, assuming they have achieved moderately good returns over an extended period, are simply unable to recognize that their historical performance most likely occurred simply due to chance…such false beliefs among horseracing bettors to the combination of cognitive biases, and the strong volatility intrinsic to returns on race betting, labeling it a ‘delusion of expertise.’
…delusions of expertise are likely to be most prevalent in skill-oriented games and in serious, otherwise rational, performance-tracking gamblers…the development of such fallacies and biases are shared between race handicapping and other nominally expert pursuits such as chartist exchange-rate speculation and professional poker.
“In any game where returns are highly volatile, and there is a reasonable expectation that skill plays a role, delusions of expertise may come into play,”…In horse betting in particular, it appears that a gambler may easily be misled into believing that an effective winning strategy had been identified, when in fact it was due to chance alone.”
It seems that it is intrinsically difficult for people to objectively evaluate their own performance under these conditions. “Unfortunately, it appears that historical performance at the track is often either ambiguous, or positively misleading, for gamblers considering their own returns.”