A Note on Payout Functions and Probabilities Related to Shin's Model

Abstract

In this extended abstract, we investigate the payout functions derived by Shin’s model, especially in the context of two-outcome events. We develop an analytical framework to calculate the expected payouts for both insider and outsider bettors and explore a new analytical solution with curious structure and details. Our findings provide new insights into the mechanics of betting markets and offer a deeper understanding of probability estimation from fixed odds.