Sunday, June 09, 2013

Don't spend money evaluating the credibility of information if you are not going to use the results!

The Belmont Stakes race, the third race of the Triple Crown, was won yesterday by Palace Malice,  with Oxbow second and Orb third. Orb was the favorite, Palace Malice was a relative long shot. While handicappers are pretty accurate, that is why they actually race horses.

Orb, the winner of the Kentucky Derby, and Oxbow, the winner of the Preakness, did well in the race, I suppose justifying the low odds attached to them by the pari mutual betting.

Which  brings me to a point on information literacy. If you bet on horse races you want to base your bet on information, not on random choice or which jockey wears silks in your favorite colors. You also want to judge the confidence you should place in the evidence. If you are an experienced handicapper you can place a lot of confidence in the racing form and the information it provides, but perhaps less confidence in your ability to interpret that information. (The trainers and jockeys know more about the horses and should be able to better judge the odds.)

If a race track tout comes up to your side and suggests a bet, it might be worth $2 since there is a certain amount of fun in watching the race, and a little more fun if you have a bet riding on it. But don't mortgage your house on the information.

In general, it costs time and money to judge the quality of information, and the amount of time and money you should be willing to spend depends on what you have to lose if you make the wrong decision based on the information you use. If having a $2 bet on a race increases your enjoyment by more than the $2, you don't need to pay for a tip sheet (unless winning on your bet increases the pleasure a lot).

On the other hand, the decision to take the United States to war against Iraq seems to have had a cost measured in thousands of lives lost, tens of thousands of wounded soldiers, millions of years of effort spent, and trillions of dollars. The United States has a very expensive, very capable intelligence system to judge the credibility of information such as that used to decide on going to war. Too bad the Bush administration failed to use it well!

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