Warren Buffett and Dan Gilbert to pay $1B to person with perfect NCAA bracket
Although the odds are infinitesimal, here's to wishful thinking...seed money for WSO Capital, anyone?
Each March, tens of millions of brackets are filled out in the hopes of predicting the outcome of the N.C.A.A.’s men’s basketball tournament. But the odds that a bracket will be perfect, that is, every game guessed correctly, are long — to the tune of 9.2 quintillion to one.So don’t bet on anyone winning the $1 billion being offered by Quicken Loans, the Detroit-based mortgage lender, with the backing of Warren E. Buffett’s Berkshire Hathaway, to anyone who fills out a perfect 2014 tournament bracket. The prize money will be paid out in 40 annual payments of $25 million, or a one-time lump sum of $500 million. The first 10 million people who enter the contest will be eligible for the grand prize.
Source: NY Times
That's at lot less that $1 billion NPV.
I wonder if you have better odds of winning this, or winning Mega Millions twice in a row
Quick math: Odds of Mega Millions (from Wiki) = 1 in ~260,000,000 Odds twice in a row = 260m^2 = 6.76 * 10^16 Odds of hitting perfect bracket = 9.2 * 10^18
Yeah, but think of the all those taxes you'd have to pay
Not to nitpick, but the 9.2 quintillion thing assumes a random distribution of outcomes in the tournament, and someone who actively follows college basketball has significantly better odds than this at acing the bracket.
According to this article, the odds of winning if you know your stuff are 1 in 128 billion. Still a shitshow.
Also, why limit the contestant pool to 10 million people? The prize will be split among the winners anyway.
by limiting the contest pool they are significantly lowering the odds of an actual winner. If I were to rig up a computer system to enter every possibility then I could win. By capping the entrants their insurance policy premium on this will be exponentially lower.
Remember Buffet isn't actually putting up the money for this. One of his insurance companies is collecting a premium for the insurance policy that is being underwritten for this contest.
WSO/CBBall fanatics should go into this together with like 50 brackets all with different but sensible outcomes. Then when we win, the 50 people get $500,000 a year instead of $0
Game theory in real life. My econ advisor would be so proud.
Guarantee you at least one team takes a dive trying to make this work in their favor.
All it takes is one upset to throw the entire bracket off
imagine if you won this
For the actuaries out there, what type of premium would you charge on this? Surely the math would suggest no more than $100 or so, but no insurer is going to take on a $1 billion liability for $100, no matter what the odds of payout are. Any ideas?
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