by now i assume most people have heard of the billion dollar bracket challenge, offered by fox or something, insured by none other than the great warren buffet. to win, you have to have a PERFECT bracket, with every game predicted.

im curious what people think the odds are of this ever happening, and how much buffet would charge to insure this 1 billion dollar potential loss. 10 million?

for starters, to oversimplify, if there is a 50% shot of picking each game, you basically have 1 in 2^67 chances of winning (assuming 68 games in the NT). 2^60 is a billion billion. so even if everyone in the world fills out a bracket, there is almost no chance anyone wins.

however, i think the real world is more complex than this. obviously a good deal of games are a lot easier than 50/50 to pick, like maybe in the first round, you could call half the games gimmes (which is obviously not the case, as 2, 3, and 4 seeds lose, but its a lot easier using 100% and 50% than weird numbers in between :), and half toss ups - this would cut out 16 games. in the second round (or maybe its called the third round now, but i HATE that nomenclature), maybe a quarter are gimmes, that would cut 4 more. if its all toss ups from there on out, that would cut 20 games. 2^47 isnt as bad, thats only 1 in 128 trillion. ok, still pretty bad :) but if a billion people did it, thats only 1 in 128,000 someone wins.

to me the interesting side comes from fixing. there is like, no way in hell you can rule that out - given the chance of someone winning legitimately seems to be approximately zero. i would be pretty afraid if anyone in gambling got close, they'd be working to fix the rest. its a lot to do in a short time, however, and the risk is probably low. but with a billion dollars on the line, its pretty hard to rule anything out!

if the odds are even close to 1 in 128,000 of someone winning with a billion entrants, it seems the insurance would only be the cost of the underwriting process (this kind of analysis) plus a small profit, plus the estimated expected loss - as 1 in 100,000, the expected loss is only 10 grand, which is nothing. there's no way fox could have gotten off at just like, a million bucks or something, could they? (seems that is ample profit off a 10 grand expected loss)

The simplest calculation (2^63) shows something absurd: 1 / (9.22 x 10^18)

Of course, the above means every game is a coin toss, which we know is not. You can apply some binomial model to each round, enhancing your odds, but the odds are still so small it's practically 0. 

sorry tianyi i accidentally hit enter before finishing

Yeah using an assumption of 60% for each pick (reality is some are practically 100% and others much closer to 50%; could be more precise), I got something along the lines of 1 in 94 trillion.  That seems..unlikely.

I don't agree with the math but given what you wrote, odds of the entire world doing it, which we know is not realistic, the odds of winning is only 1/128,000. Insurance policy against the 1B buffet is putting ups should be fair valued at 1B/128,000, or $7800. 

Posted by tianyi7886 on 3/6/2014 5:42:00 PM (view original):
I don't agree with the math but given what you wrote, odds of the entire world doing it, which we know is not realistic, the odds of winning is only 1/128,000. Insurance policy against the 1B buffet is putting ups should be fair valued at 1B/128,000, or $7800. 

which part? also, "should be fair valued" seems like a stretch. nobody is going to risk a billion dollars on an expected avg loss of $7800 for a mere $7800. Insurance companies have to make money, too :) I realize they usually make little off the insurance, rather making money off investing that money, but this seems like too special of a case.

with so many games in such a short time, it sure seems hard to fix, but if you got to say, the final 4, i could definitely see it. i suppose that only knocks out 3 games but thats still an 8 times multiplier. 

Posted by gillispie1 on 3/6/2014 5:47:00 PM (view original):

Posted by tianyi7886 on 3/6/2014 5:42:00 PM (view original):
I don't agree with the math but given what you wrote, odds of the entire world doing it, which we know is not realistic, the odds of winning is only 1/128,000. Insurance policy against the 1B buffet is putting ups should be fair valued at 1B/128,000, or $7800. 

which part? also, "should be fair valued" seems like a stretch. nobody is going to risk a billion dollars on an expected avg loss of $7800 for a mere $7800. Insurance companies have to make money, too :) I realize they usually make little off the insurance, rather making money off investing that money, but this seems like too special of a case.

with so many games in such a short time, it sure seems hard to fix, but if you got to say, the final 4, i could definitely see it. i suppose that only knocks out 3 games but thats still an 8 times multiplier. 

The 2^47 isn't right. Discounting 16 games seems like way too big of a number. 15  through 12 seeds upsetting 2-4 seeds happen quite frequently in the first round, and so does 8/9 seed upsetting 1 seed in the 2nd round. 

2^48 means your chance of winning is reduced by 50% and the real number is something higher in this simplistic model of a coin toss for each game. 

If you were to calculate precise odds, the model has to be binomial but precision doesn't really matter when the number is pretty much 0.

Posted by gillispie1 on 3/6/2014 5:47:00 PM (view original):

Posted by tianyi7886 on 3/6/2014 5:42:00 PM (view original):
I don't agree with the math but given what you wrote, odds of the entire world doing it, which we know is not realistic, the odds of winning is only 1/128,000. Insurance policy against the 1B buffet is putting ups should be fair valued at 1B/128,000, or $7800. 

which part? also, "should be fair valued" seems like a stretch. nobody is going to risk a billion dollars on an expected avg loss of $7800 for a mere $7800. Insurance companies have to make money, too :) I realize they usually make little off the insurance, rather making money off investing that money, but this seems like too special of a case.

with so many games in such a short time, it sure seems hard to fix, but if you got to say, the final 4, i could definitely see it. i suppose that only knocks out 3 games but thats still an 8 times multiplier. 

Sure, you are not pooling risk because this is a single bet so they probably wouldn't take the 20% premium and insure it for $10k, but the $10M number is absurd. I have a feeling most insurance companies would jump at the chance to insure this for $20k. 

So much math talk in the forums today it's hurting my head. Thank God people like you all exist, but I will stick to the other side of the brain. 

I am getting the vibe that it isn't worth entering, however?

Posted by caesari on 3/6/2014 6:07:00 PM (view original):
So much math talk in the forums today it's hurting my head. Thank God people like you all exist, but I will stick to the other side of the brain. 

I am getting the vibe that it isn't worth entering, however?

It might not be worth it if there were a fee, but it's free so why not give it a shot?

Somebody did the math when adjusting for an educated basketball fan, and even then the odds were insane something like 1 in 80 billion. 

The contest is also "limited" to the first 15 million entrants.

Can't believe somebody hasn't brought up the Lloyd Christmas line yet.

My question is..if by some freak chance you got to the championship game with a perfect bracket...how much alcohol are you going to need to keep calm knowing that the fate of "your" billion dollars is riding on the backs of 19-21 year olds?

Posted by rednu on 3/7/2014 12:00:00 AM (view original):
My question is..if by some freak chance you got to the championship game with a perfect bracket...how much alcohol are you going to need to keep calm knowing that the fate of "your" billion dollars is riding on the backs of 19-21 year olds?

im pretty sure alcohol wouldn't cut it... whats that horse tranquilizer turning people into zombies down in puerto rico? maybe something like that would be more on the level ;)