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David Peel, David Law


The purpose in this paper is  to demonstrate how the non-expected utility models of Markowitz and Kahneman and Tversky  can explain why an agent, chooses to bet  each way on a horse.

We also show that that appeal to moments of return, such as a preference for skewness of return, ceteris paribus, to explain the choice of the each way gamble over the single win gamble is , in general, invalid.


Markowitz Utility Function, Cumulative Prospect Theory, Expo-Value Utility Function, Probability Distortion, Gambling.

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