Tuesday, July 19, 2022

The Racing Bettors' 4th and 2 Problem that Just Won't Go Away

For about 130 years of pro football, 4th and two was beset with a flight to safety. Not going for it (the pain of missing a first down) always trumped the joy (and win edge) of making it. 

Then something - the thing we see on our TV screens each Sunday - happened. The theory was flipped on its head as the narrative changed. Now the pain of not going for it (where it's mathematically the right thing to do) trumps the pain of punting. 

This has been pretty amazing, because, as we've spoken about before, the Nobel Prize winning concept of Prospect Theory is in human nature. Humans put a hyper-proportional weight on something they are giving away than the weight of something they could acquire. 

Over in wagering land here in horse racing, we might be starting to get over the hump, but we are not there yet. Let me rephrase that, the people who beat the game are over the hump - people like Tony Zhou and the betting teams -  and have been for some time. But casual bettors just can't seem to shake it. 

I think we all know the feeling. We put so much work in something (I spent 4 or 5 hours on the last Saratoga pick 6, like many of you), that we tend to want to blanket, to play it more with the crowd; our flight to safety. The pain of losing after spending all that time means an A ticket with Reinvestment Risk and a B ticket with Baby Yoda or the speed 7 horse. 

We know what we are doing is wrong at times. I loved In Italian like many of you. We knew it was a mathematical edge. I didn't like Fort Ticonderoga like many of you. Not using was the edge. Why did I have the two year old on my ticket? Why did I have Bleecher Street?

Because I too am a slave to Prospect Theory. I put in the work, I, with cognitive dissonance like some intellectually inconsistent political knob on twitter, made excuses.  I convinced myself that if I did not have these chalk I didn't like, I might thread the needle on other legs and miss a $150,000 pick 6 and I'd feel terrible. I made every bogus argument to have horses on my ticket that I didn't want to have on my ticket. 

This is an incredibly hard game and the pools are very efficient. Just because there are five races in a row it doesn't somehow make them inefficient, even though we seem to want to convince ourselves it somehow does. We use crutches to construct tickets. We fly to safety. We somehow convince ourselves that a strategy of taking a four game NFL parlay with four teams we love, and then backing them up by taking the other sides can be long-term profitable; although we know this is mathematical insanity. 

We end up punting on 4th and 2, and dammit we're going to keep punting on 4th and 2. 

The NFL learned long ago that doing that was sub-optimal. Now, even commentators like Troy Aikmen have turned into these mathy "go for it" trailblazers. If we as players get to that point in horse racing quicker than others do; before it becomes accepted as a truth, we have some time to make some scratch. And that's what we're all here for right?

Have a great Tuesday everyone. 

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