Strategy
Favorite-longshot bias
The tendency for long shots to be overpriced and favorites underpriced relative to their true chances.
Across horse racing, sports betting and prediction markets, outcomes priced at 5 percent tend to happen less than 5 percent of the time, while outcomes priced at 90 percent happen slightly more often than 90 percent. Buyers like cheap tickets with big payouts and dislike tying up capital for small returns.
In prediction markets the bias is strongest in long-dated, multi-outcome markets with many candidates, where the sum of long-shot prices can exceed what is logically possible.
The practical lesson: a 3-cent contract is usually worth less than 3 cents, and a 95-cent contract is often worth a little more.
📱 Compare how the same event is priced across venues on Polymtrade.Referral link. 18+.
Where you will see it on BetG8
More strategy terms
Frequently asked questions
- What does "Favorite-longshot bias" mean?
- The tendency for long shots to be overpriced and favorites underpriced relative to their true chances.
- Why does favorite-longshot bias matter for prediction markets?
- The practical lesson: a 3-cent contract is usually worth less than 3 cents, and a 95-cent contract is often worth a little more.