End-of-the-Day Betting Effect

The end-of-the-day betting effect is a cognitive bias reflected in bettors' tendency to take higher-risk, higher-reward gambles at the end of a betting session in an attempt to make up for earlier losses. William McGlothlin in 1956 and Mukhtar Ali in 1977 first identified the effect after observing shifts in betting patterns at horse-racing tracks, finding that bettors were significantly more likely to favor longshots over conservative bets on the last race of the day; the resulting movement away from favorites and toward longshots is pronounced enough that, in some studies, conservatively betting on the favorite to place in the last race is shown to be a profitable wager despite the track's own cut.