Bracket principles to remember
The Final Four office pool has recently come under fire, proving once again that eternal verity that someone can find fault with even the most enjoyable and innocuous of pleasures. A growing army of cynics, the adult equivalent of hall monitors, are asserting that "bracketeering" has become a drain on worker productivity. One consulting firm estimates that employees participating in pools will cost businesses upwards of $2 billion in lost labor this month.
We contend the office pool creates a surge in workplace morale that outstrips what is ultimately a
Regardless, mirroring the tournament itself lately, the NCAA office pool expands continuously. This week, as many as 60 million Americans will put down their $5, $10, $20 or often more, trying to divine the fortunes of the 68 teams. Some folks will win by tapping into a vast reservoir of college hoops knowledge. Others will win by picking games based on the relative cuddliness of mascots or the attractiveness of a school's color scheme. One of the many great appeals of the pool is the randomness.
We figure that if you're going to dive into the pool, you may as well land in the deep end. The best way to tilt the odds in your favor? Think of your bracket as a financial portfolio and use behavioral economics and principles of investing to maximize the chances of a windfall.
• The Vegas Line is your friend. Market pricing tends to be strong aggregator of information. Why? Because people aren't just talking; they're voting with real dollars, and pricing provides a tidy summary of everyone's information. As many mutual funds, hedge funds and investment advisors find out the hard way, it's tough to beat the market consistently. Same holds true in sports. If your pick is at the extreme end of the Vegas line, think long and hard about what piece of information you think you possess that everyone else is missing.
• That said, some variance is your friend as well. Pick the top seeds and you'll fare respectably, not unlike the broker who invests in a conservative index fund or buys standard blue chip stocks. But this isn't value investing and you're not in it for the long term; if you have designs of winning big, you need to take some risks. Academic research on the office pool -- yes, it exists -- suggests that fans often pick a 15 seed to beat a second seed because it's happened several times, though not since Hampton in 2001. But fans almost never pick a 16 seed to beat a top seed. At some level, this stands to reason: Since the tournament went to a 64-style bracket, a top seed has, of course, never lost in the first round. But just because it hasn't happened doesn't mean it won't. (Think back to the recent global financial meltdown, when many hedge funds-now ex-funds-believed that "stocks and bonds never crash at the same time.") It
• The selection committee tends to seed teams based largely on win-loss records, strength of schedule and performance in recent games. But you have the ability -- and, depending on your pool, the extra three days -- to base your picks on more nuanced and creative data. Look, for instance, at the decisiveness of a team's wins and losses. Much as we like to believe that certain teams "simply know how to win close games," truth is, close games may be largely determined by simple good and bad luck, the outcomes differing little from random chance. So consider point differentials rather than discrete wins and losses. Look, too, at how teams fared on a neutral court or how that smallish team from a mid-Major school fared against the tallest front lines they faced.
• When picking fund managers, too many investors have made the mistake of focusing on recent extreme performance in hopes it presages future success. It doesn't. Likewise, don't put too stock in momentum when making picks. For as often as we hear about teams "coming in on a roll" or "getting hot in time for the tournament," there's little indication that good teams that win their conference tournament fare better statistically than good teams that don't. The worst recent performers are likely to do just as well as the best recent performers. For as often as we hear about the teams "riding the wave of momentum" (see: Jim Valvano's 1983 North Carolina State team) there's seldom much predictability to it. We're less inclined to recall teams like the Florida Gators that lost three of their last five regular-season games in both 2006 and 2007 before going on to win and defend an NCAA title.
While we won't fill in our brackets until the last possible moment -- there's no incentive to file early -- we'll tip Ohio State and faltering Texas. Ohio State wins a lot and by a lot. They play well on the road. They have a large and mobile fan base. Believe it or not, we also like Texas -- at least relative to "price" -- even though you'd be hard-pressed to find a team (this side of Georgetown) with less momentum. And, come think of it, both of their mascots are pretty darn cute!
• During the next three weeks, referees will attempt to even out the number of whistles blown against each team. So claims a study coauthored by Ball State's David Pierce, a sport administration professor. A study of NCAA basketball games during the 2004-05 season found that when games are played on neutral courts (regular season and postseason), fouls assessed are relatively even at the end of the contest. "The probability of the next foul being called on a team increases as the net foul differential increases," Pierce says. "So, fans who keep an eye on the foul trends during a game can be pretty certain that if their team has two fouls and the other team has six, their team will be called for the next foul."