Analytics Magazine Analytics Magazine, May/June 2014 | Page 83

PHOTO BY STEPHEN SLADE. COURTESY OF UNIVERSITY OF CONNECTICUT Shabazz Napier (13) leads UConn to victory over Kentucky in the 2014 NCAA Championship game. I was bemused to read this article [1] in Slate magazine detailing the odds of Warren Buffet’s basketball challenge, which may be found here [2]. [Buffet offered a billion dollars to anyone who submitted a perfect bracket (i.e., correctly predicting the winner of all 63 games) of “March Madness,” otherwise known as the NCAA Men’s Basketball Championship Tournament.] A billion dollars – even with taxes – is a lot of money. How hard is it to come up with a perfect bracket? There is only one perfect bracket in a world with many potential brackets, so we first need to find out how many possible brackets there are. The NCAA is a single elimination tournament, which means that each team plays until they lose. In a single elimination tournament, each round is made up of n teams, with n / 2 games n /2 played. Therefore, there are 2 possible outcomes in the first round. Knowing that the tournament starts with 64 teams, there are possible outcomes for the first round. Using similar calculations at each round, there are possible outcomes, only one of which is correct. For comparison’s sake, 1 billion is a thousand million, or 109 so the odds of winning the basketball challenge 9 2 are around 1: (10 ) or one in a billion billion 3 . So, it appears your odds of winning are not very good at all. Frequently, one can get a feel for the value of a gambling game by the “fair price” that one would be willing to pay to play the game; specifically, the value that would make one indifferent between playing the game and just keeping their money. For this game, a “fair” price would be nine million attempts per penny! M A Y / J U N E 2 014 | 73