The Kentucky Derby
The Kentucky Derby, one of the most lucrative betting events that occurs the first Saturday every May, has been around since 1875 until now. On this day, people bet on horses they think will win the race and the winnings can go into the millions. This annual race incorporates much of what is learned in Networks.
A primary reason why the Kentucky Derby sees such circulation of currency is because thousands of people place bets on horses they believe will win in hopes of winning big against the odds. As we learned in class, the best way to maximize profit when betting on horses is to bet what you believe. These methods still play a role even though we now have 20 horses instead of 2 horses. Unfortunately, not everyone is a connoisseur of horse races. So how does one quantify their beliefs? The most important information for betters is to have a good sense of which horse is most likely to win the Kentucky Derby. If you are deeply invested in the horse betting world and have connections to other horse connoisseurs, Network Cascades can play a role. For example, if you think your horse connoisseur friends have a good sense of which horse will win and you personally are not so sure, your q threshold may be low. This example translates to a network where you are the center node connected with all of your horse connoisseur friend nodes. If just a couple of your friends adopt the idea that horse X will win, you are likely to adopt this same thinking and bet on horse X if your q threshold is low. On the other hand, if you are confident in your bet on another horse Y, your q threshold may be high and unless a lot of your friends claim horse X is likely to win, you will not adopt the thinking of your friends easily.
Similar information cascades can occur for people who are knowledgeable of the equine racing industry. This website is an example of how information cascades can start. This article clearly conveys several horses that the author believes are worth betting on. If you know nothing about horse betting, this article may seem very convincing and you will thus likely bet on these horses and other websites may just use this information and reiterate to be on these same horses. Since a reputable site like Forbes recommends to bet on these horses, an information cascade of betting on these horses for the direct benefit of winning money can begin. For example, you may post on social media tht you are going to be on Irish War Cry because this Forbes article said so. Then if your friends see this, they may also adopt this same thinking. Although in retrospect, this was a false information cascade because Always Dreaming ended up winning despite the article not recommending to bet him, this shows that horse bets can be suspect to information cascades especially for people who are inexperienced in the field they are betting in.
https://www.forbes.com/sites/guymartin/2017/05/04/kentucky-derby-2017-how-to-bet-an-inexperienced-field-and-the-best-mudders/#60fd586d19f3