By Max Kaplan
A couple months ago, I wrote an article that showed how to perform better in bowl confidence pools than 90% of all participants by just following the simple strategy of following the consensus of the nation (by either Yahoo averages or betting lines).
To be successful, you didn’t need to know who was playing or who was better. You didn’t need to pick upsets and you didn’t even need to predict the outcome.
Here, I will try to find a similar strategy for college basketball
The basic underlying theory should apply to March Madness as well. You should not try to predict the outcomes of the games to maximize your chances. Logically speaking, why would you be able to better predict the outcomes of basketball games better than the other millions of brackets? ESPN alone has 8,145,000 entries. And guess what? Most of them think they are above average too. Now that the first (second?) round is done, about 95% still have their national champion pick still alive and probably feel even more confident. Unless you have insider information (and those coaches, athletes, and others that do are not allowed to gamble by NCAA regulations), there is no reason to think you can win your pool with a game-by-game approach.
In each pool, there is only one winner. Presumably, the whole point of making a bracket is to win the pool for bragging rights, since I would never in a million years dream of even thinking of doing anything in the proximity of gambling underage. Therefore, you should play your opponents as opposed to your own bracket, much like in poker.
In essence, you can neither control nor accurately guess 67 probabilistic results, but you can adjust your predictions relative to your competition. You just need to find where others are making probabilistic blunders.
For example, I am very knowledgeable about the Big Ten and the Ivy League because I have a rooting interest in the two. However, the biggest gaff (and the most common mistake) that people can make is overrating their own teams. This is the case for an alma mater, the league that they play in, and, more generally, popular teams that you see on television (Duke, North Carolina, etc). It is because of this that I consciously chose fewer Big Ten teams to succeed than I would have preferred. In a pool of Duke grads, it wouldn’t be very smart to chose Duke to go all the way.
Now you may ask, so what? How can this help me win?
Below is a chart of all teams with a greater than 1% chance of winning according to betting lines (historically, betting lines are very good at predicting outcomes). It finds the difference between the % of people that chose each team to win the national championship and the adjusted (so that the percentages add up to 100) betting lines should show which teams are under and overvalued.
7 out of the 8 favorites to win the title are overvalued. People like choosing favorites. The lone exception is Florida, who has 7 to 1 odds but was chosen by only 2.7% . The betting lines have Florida as 3rd, while the bracket entries have Florida as 9th. This is why I chose Florida to win it all.
Below are the same percentages sorted by Yahoo % instead of betting line. The top 7 most popular picks on Yahoo are all overvalued. This may be because we round up high percentages. Notice that Louisville is both the consensus best team and most overvalued. There is a very high chance that a 1 or 2 seed wins the tournament. Because of this, we assume that there is almost no chance that anyone else can win it. However, the chances are more than the 13% that is given by Yahoo users.
Winning your pool almost always comes down to choosing the winner. While Florida is still not the favorite to win the tournament, you are trying to outdo your peers. For instance, if you chose Louisville, you would still most likely need to correctly guess the other finals team as well as 3 or 4 Final Four teams in order to win the pool. Winning your pool suddenly shifts from choosing 6 games correctly (round of 64 to finals) to 11 or more. Choosing an undervalued team increases your odds of winning a pool even if it means you are less likely to choose the champion.
If the betting data existed publicly for every round (and please comment below if you can find something like this), this would be the best strategy to fill out the entire bracket and we would likely end up with a very high national percentile.
I will continue this search for the winning bracket later this week, where I will look beyond just choosing the national champion.
3 Implications of Choosing an Undervalued Team like Florida
1. The betting line gave Florida an 8.7% chance to win it all. I needed the betting line to be fairly accurate in order to compare it with the picks on Yahoo. In reality, I could have used Nate Silver’s or any other “expert” model as the baseline. But historically, betting lines have been the best. The reasoning is as follows. If someone could consistently create a model that could forecast games better than the betting line, they would just bet on that team and make boatloads of money. The line would shift until it is no longer profitable. Oh, and they wouldn’t publicly release the profitable model either. Free Market 1, Experts 0.
2. Notice that it is much easier to lose money choosing the wrong team than it is to make money choosing the right team. Louisville was -15.7% and Indiana was -6.3%. Just like in poker, it is much much easier to squander your money than it is to profit.
3. So choosing Florida (+6%) gives you an 8.7% chance of being in the top 2.7% of brackets. With all else being equal, this choice alone gives you an average national percentile close to 56%. However, choosing an underdog is a risky strategy and it leads to more disparate outcomes. You will win your pool more than average but also be far less likely to finish in other high percentiles (below 97th). It is somewhat an all or nothing strategy. However, winning should be the only outcome that matters.