The investor's Omaha company Berkshire Hathaway has teamed up with Quicken Loans to offer a $1 billion prize to anyone who can correctly predict the outcome of every game in the NCAA tournament this spring.
Although a big prize fund is at stake, the odds are stacked. In more than 30 million entries over the past 16 years that the challenge has run there has never been a winner.
Although a big prize fund is at stake, the odds are stacked. In more than 30 million entries over the past 16 years that the challenge has run there has never been a winner.
Challenge: Philanthropist Warren Buffett and Quicken Loans are offering the huge prize fund for the spring tournament
But if someone can correctly predict the winners in every tournament game, they stand to earn themselves an annual income of $25 million a year for the next 40 years.
The winner will also be able to request an immediate $500 million lump sum payment, according to Detroit-based mortgage company Quicken Loans.
For the companies involved it must appear a safe investment. Billionaire Buffett's group ESPN said that in the 16 years that it has run the popular challenge, which has even attracted President Obama, there has never been a winner.
CBS Sports, which also has run a pool for years, has never had a perfect entry either. Last season, no unblemished brackets made it through the round of 64.
Buffett told CNN Money that if one entrant looks close to winning by the final game in Texas on April 7, he will invite them to attend the game with him as his guest.
'I will invite him or her to be my guest at the final game and be there with a check in my pocket, but I will not be cheering for him or her to win,' he said, jokingly. 'I may even give them a little investment advice.'
Quicken Loans said it will offer to split $2 million among the 20 most accurate predictions submitted for the contest.
It will also donate $1 million to educational charities in Detroit and Cleveland, the two cities that are the main focus of Quicken founder and chairman Dan Gilbert's activities.
'We've seen a lot of contests offering a million dollars for putting together a good bracket, which got us thinking, what is the perfect bracket worth? We decided a billion dollars seems right for such an impressive feat,' Jay Farner, president and chief marketing officer of Quicken Loans, said.
Only one bracket submission per household is allowed.
Submissions are limited to one per household and the deadline for entry, which is free, is March 19. Those hoping to be on to a winning formula will not be able to make their selection until the brackets are selected on March 16.
Buffett told CNN Money that if one entrant looks close to winning by the final game in Texas on April 7, he will invite them to attend the game with him as his guest.
'I will invite him or her to be my guest at the final game and be there with a check in my pocket, but I will not be cheering for him or her to win,' he said, jokingly. 'I may even give them a little investment advice.'
Quicken Loans said it will offer to split $2 million among the 20 most accurate predictions submitted for the contest.
It will also donate $1 million to educational charities in Detroit and Cleveland, the two cities that are the main focus of Quicken founder and chairman Dan Gilbert's activities.
'We've seen a lot of contests offering a million dollars for putting together a good bracket, which got us thinking, what is the perfect bracket worth? We decided a billion dollars seems right for such an impressive feat,' Jay Farner, president and chief marketing officer of Quicken Loans, said.
Only one bracket submission per household is allowed.
Submissions are limited to one per household and the deadline for entry, which is free, is March 19. Those hoping to be on to a winning formula will not be able to make their selection until the brackets are selected on March 16.
[h=2]Warren Buffet is offering one billion dollars to anyone who can predict a perfect March Madness bracket? What would be your strategy and what are the odds of winning?
— Wizard's_mom from California[/h] Lots of people have asked me about that. For those unfamiliar with March Madness, it is a single-elimination basketball tournament between 64 teams. Actually, there are extra games to get into the final 64, but Warren isn't looking at those.
In the 64-game format, it takes 32+16+8+4+2+1=63 games to determine a winner. If one were to guess randomly, then the probability of getting all of them correct would be (1/2)[SUP]63[/SUP] = 1 in 9,223,372,036,854,780,000.
However, one can significantly improve his odds by always picking the higher ranked team in each game. The following table shows the probability of the higher ranked team winning each possible match-up under this strategy, based on March Madness data since its inception in 1985. For the three games where a 1 seed plays another 1 seed, I assume a 50% chance of picking correctly.
Explanation of the columns:
If you take the product of every probability in the right column, then you get a probability of 1 in 46,940,073,802. Suffice it to say, about 1 in 47 billion. Not counting the consolation prizes, a free entry would have an expected value of 1/47 = 2.13¢.
I'm sure I'm not the only one to think of this strategy. My advice would be to not pick the higher ranked team in every single game. You'll notice in the games between an 8 and 9 seed, the 8 seed wins 50% of the time only. So, I would at least throw in some 9 seed picks. Maybe at least one 10 seed as well.
http://wizardofodds.com/ask-the-wizard/285/
— Wizard's_mom from California[/h] Lots of people have asked me about that. For those unfamiliar with March Madness, it is a single-elimination basketball tournament between 64 teams. Actually, there are extra games to get into the final 64, but Warren isn't looking at those.
In the 64-game format, it takes 32+16+8+4+2+1=63 games to determine a winner. If one were to guess randomly, then the probability of getting all of them correct would be (1/2)[SUP]63[/SUP] = 1 in 9,223,372,036,854,780,000.
However, one can significantly improve his odds by always picking the higher ranked team in each game. The following table shows the probability of the higher ranked team winning each possible match-up under this strategy, based on March Madness data since its inception in 1985. For the three games where a 1 seed plays another 1 seed, I assume a 50% chance of picking correctly.
| March Madness — Wizard Strategy to Perfect Bracket | |||||
|---|---|---|---|---|---|
| Match | Games | Wins | Prob. Win | Number Games | Prob. All Winners |
| 1 vs 16 | 116 | 116 | 1.000000 | 4 | 1.000000 |
| 8 vs 9 | 116 | 58 | 0.500000 | 4 | 0.062500 |
| 5 vs 12 | 116 | 75 | 0.646552 | 4 | 0.174748 |
| 4 vs 13 | 116 | 91 | 0.784483 | 4 | 0.378733 |
| 6 vs 11 | 116 | 78 | 0.672414 | 4 | 0.204431 |
| 3 vs 14 | 116 | 99 | 0.853448 | 4 | 0.530529 |
| 7 vs 10 | 116 | 70 | 0.603448 | 4 | 0.132605 |
| 2 vs 15 | 116 | 108 | 0.931034 | 4 | 0.751386 |
| 1 vs 8 | 60 | 49 | 0.816667 | 4 | 0.444815 |
| 4 vs 5 | 62 | 34 | 0.548387 | 4 | 0.090438 |
| 3 vs 6 | 64 | 36 | 0.562500 | 4 | 0.100113 |
| 2 vs 7 | 66 | 50 | 0.757576 | 4 | 0.329385 |
| 1 vs 4 | 52 | 36 | 0.692308 | 4 | 0.229719 |
| 2 vs 3 | 48 | 29 | 0.604167 | 4 | 0.133238 |
| 1 vs 2 | 56 | 31 | 0.553571 | 4 | 0.093906 |
| 1 vs 1 | 0.500000 | 3 | 0.125000 |
Explanation of the columns:
- Match: This shows the seeds of the two teams playing. The lower the number the higher the rank.
- Games: How many games have been played with this scenario.
- Wins: How often the higher ranked seed has won.
- Prob. Win: Ratio of wins to games.
- Number of Games: Number of such match-ups if the higher ranked team always wins.
- Prob. all Winners: The probability of winning each such match up. This would be the Prob. Win column to the power of the Number of Games.
If you take the product of every probability in the right column, then you get a probability of 1 in 46,940,073,802. Suffice it to say, about 1 in 47 billion. Not counting the consolation prizes, a free entry would have an expected value of 1/47 = 2.13¢.
I'm sure I'm not the only one to think of this strategy. My advice would be to not pick the higher ranked team in every single game. You'll notice in the games between an 8 and 9 seed, the 8 seed wins 50% of the time only. So, I would at least throw in some 9 seed picks. Maybe at least one 10 seed as well.
http://wizardofodds.com/ask-the-wizard/285/
