March Madness or Method? Part 1

In many parts of the country, there’s still too much snow on the ground to hear lawn mowers humming or baseball bats cracking. But trust me, spring really is here. I know because the annual NCAA men’s basketball tournament—a.k.a March Madness—is underway. Just don’t expect a highly productive month around the office.

Depending on your point of view, the three-week long hoop-fest is either the biggest office productivity killer of the year, or a fascinating window into human behavior, biases and predictive modeling. March Madness is also pretty good for building camaraderie, even if the HR wonks will complain that it’s an unsanctioned company event, that it’s male- and jock-biased and that it’s basically an illegal gambling operation conducted on company premises, using company time and computers. Again, review the previous sentence about “camaraderie.”

Level playing field

It’s also one of those rare times when Ted from sales, who’s 6-foot-6 and played power forward in college, can get schooled by 5-foot-2 Mary from accounting, who’s never set foot on the hardwood, much less played the game. How? Because she knows how to fill out her brackets.

The format is simple; 64 of the best college basketball teams are invited to play each other in a single-elimination, winner take all tournament. Win and you advance to the next round. Lose and you go home. No best of seven, no do-overs. No bonus points for giving it your best. You could be 34-0 during the regular season, like Kentucky, and have an off night against unheraled Hampton University and that’s it. Season over. See you in November.

In most office pools, you print out the entire tournament “bracket” before the games begin. You predict which team you think will win each matchup and throw a few bucks into the pot. Most folks can fill out their bracket in 10 minutes or less, whether using pencil, pen or an app. If you end up winning the pool, you can make anywhere from 20- to 1,000-times your money back. If you lose, the max downside is usually less than $20, so you don’t even need puts or stop loss orders. Either way, it’s a pretty good ROI for three weeks of fun.

So how hard can it be to win? Everyone has access to the same information--they even give you each team’s won-loss record as well as their seeding (i.e. ranking) in the tournament. Just pick the team with the better record or higher seeding and you’re good to go, You don’t even have to guess the score or the point spread. Just who will win.

So why does Warren Buffet offer a $1 billion cash prize (that’s with a “B”) to anyone who can pick a perfect bracket and guess the outcome of all 63 games correctly?
Because, it’s almost impossible to predict all the upsets. It’s like trying to pick which early stage startup company with no revenue or earning is going to go public next year. In fact the odds of winning March Madness are worse than the lottery--about 4.3 billion to 1. The odds are beyond stacked against us, but tens of millions of us can’t help ourselves from filling out at least one bracket every March—even if we don’t follow college basketball or never played the game.

Conclusion

In our next post, we’ll tell you about some of the research services, rating agencies and indices you can use to help you along. Hint: It’s pretty hard to beat the wisdom of the crowd? Any of this sounding familiar?

Our blog has more, as does the FREE Resources page of our website.

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TAGS: March Madness, wisdom of the crowd, brackets, office camaraderie