From: stewarts@ix.netcom.com
Date: Mon, 4 Nov 1996 00:35:14 -0800 (PST)
To: ichudov@algebra.com (Igor Chudov)
Subject: Re: anonymous oddsman
Message-ID: <1.5.4.32.19961104083318.005ed560@popd.ix.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


>What I do is the following: I go to the Ladbroke's and offer to pay the
>gamblers not $6, but $6.01 if Dole wins. Being somewhat rational, these
>traders gamblers see a better deal than Ladbroke's offers, and
>give me their $1 bills. This is very simple.
>I take their $1 bills and run to "William Hill", where I take another
>side of the bet. 
> In particular, I buy $6.01 / $10.00 bets for each dollar that I receive.
> The remaining money $1(1-6.01/10) I simply take to my bank.


Ah.  If you can exploit\\\\\\\ provide arbitrage services for these folks,
go ahead.  You'd probably need to offer them $7-8 to deal with
the difference in reputation between you and Ladbroke's, 
but assuming you can get customers and nobody breaks your legs, you do win.
One reason the market isn't more efficient is that it's only being 
played once, and the odds are pretty lopsided, since Dole really has no chance.
What's more interesting is that Ladbroke's aren't doing this themselves -
if they're not.  In a repeated game, or a closer one, the odds would probably
tend to be the same at both houses.


#			Thanks;  Bill
# Bill Stewart, +1-415-442-2215 stewarts@ix.netcom.com
# You can get PGP outside the US at ftp.ox.ac.uk
  Imagine if three million people voted for somebody they _knew_,
  and the politicians had to count them all.