Ex Ante and Ex Post - Pace and Cap

rdiam · 05-15-2019, 05:46 PM

There continues to be confusion among several posters between what is referred to as Ex Ante and Ex Post thinking. It important to understand the difference:

Ex Ante means "before the event". When you bet on horses or make any other kind of prediction, you are doing so "ex ante"; that is, you have to make your bet BEFORE the race is run. Kind of obvious.

Ex Post means "after the event". After the race is run, there is only 1 winner (assuming no dead heat) "ex post"; that is, the winner has a win probability of 1.0 and all of the other horses in the race have a win probability of 0.0. Again, kind of obvious, but unfortunately, you generally cannot bet a race after it has been run (assuming nothing devious like past posting).

So those who insist that you need to pick winners are right -- ex post. Buying a lottery ticket (a horrible -EV bet with the possible exception of a large carryover) loses you money EX ANTE, but if you win, it was the RIGHT decision EX POST.

Since we have to bet before the race is run, we need to deal in probabilities. Every horse has some chance to win the race -- some more than others. We need to focus on making the right decision with the information we have available to us, NOT on making the perfect decision.

Win percentages matter, but so do odds. It is the combination of these that determines whether we are betting with an edge (+EV).

What if I gave you a system that hit, on average, 40% winners betting 1 horse a race? A show of hands, please. Sounds like a good deal. Now, what if that system produced the 40% winners at average odds of 6/5? Lots of winners, but -EV (for those mathematically challenged, the breakeven odds for such a system is 3/2).

The system, by the way, is to just bet the tote board favorite...

Bottom line, it is important to differentiate between ex ante and ex post thinking. Sure, you need to pick a winner to cash a ticket, but that is ex post thinking. Better off using ex ante thinking which understands that mathematically we must bet at +EV. Certainly, every professional bettor understands this concept, and do their best to avoid -EV wagers. Casino hotels are built on trying to provide only -EV bets to patrons. Think ex ante, not ex post.

Richard

05-15-2019, 05:46 PM	#1
rdiam Grade 1 Join Date: Sep 2016 Posts: 606	Ex Ante and Ex Post There continues to be confusion among several posters between what is referred to as Ex Ante and Ex Post thinking. It important to understand the difference: Ex Ante means "before the event". When you bet on horses or make any other kind of prediction, you are doing so "ex ante"; that is, you have to make your bet BEFORE the race is run. Kind of obvious. Ex Post means "after the event". After the race is run, there is only 1 winner (assuming no dead heat) "ex post"; that is, the winner has a win probability of 1.0 and all of the other horses in the race have a win probability of 0.0. Again, kind of obvious, but unfortunately, you generally cannot bet a race after it has been run (assuming nothing devious like past posting). So those who insist that you need to pick winners are right -- ex post. Buying a lottery ticket (a horrible -EV bet with the possible exception of a large carryover) loses you money EX ANTE, but if you win, it was the RIGHT decision EX POST. Since we have to bet before the race is run, we need to deal in probabilities. Every horse has some chance to win the race -- some more than others. We need to focus on making the right decision with the information we have available to us, NOT on making the perfect decision. Win percentages matter, but so do odds. It is the combination of these that determines whether we are betting with an edge (+EV). What if I gave you a system that hit, on average, 40% winners betting 1 horse a race? A show of hands, please. Sounds like a good deal. Now, what if that system produced the 40% winners at average odds of 6/5? Lots of winners, but -EV (for those mathematically challenged, the breakeven odds for such a system is 3/2). The system, by the way, is to just bet the tote board favorite... Bottom line, it is important to differentiate between ex ante and ex post thinking. Sure, you need to pick a winner to cash a ticket, but that is ex post thinking. Better off using ex ante thinking which understands that mathematically we must bet at +EV. Certainly, every professional bettor understands this concept, and do their best to avoid -EV wagers. Casino hotels are built on trying to provide only -EV bets to patrons. Think ex ante, not ex post. Richard