Calibration of Subjective Probability Judgments in a Naturalistic Setting

Results of previous calibration studies are used to identify features of the decision maker and the decision environment which might be expected to result in good calibration. Racetrack bettors and, in particular, the UK parimutuel betting market are identified as possessing such characteristics. In order to explore calibration in this setting, an analysis is undertaken of bets placed on 19,396 horses. A close correlation is observed between the subjective probability judgments of horses' success, implicit in the bettors' wagering activities, and the objective probability of success of the horses concerned. Explanations for the results are offered in terms of characteristics of racetrack bettors and the naturalistic setting, with particular reference to the operation of the betting market. The results contribute to an emergent school of thought which advocates naturalistic enquiry as a complement to laboratory-based experiments in further developing the understanding of decision making.