Register for our Completely Unique March Madness Challenge
In order for this post to make sense, you’re best off reading our 2016 update on March Madness. However, for the TL;DR crowd, the crux of this multi-year rant is that typical March Madness bracket rules are garbage because the most skilled picker has virtually no chance of winning. This is a terribly unsporting injustice, and we‘re here to set things right.
Here’s how our 2016 March Madness Bracket Challenge is going to work:
1. At the outset of the tournament, each team is assigned a point value equivalent to the natural log of their inverse proportion of winning the entire tournament. For example, If Kentucky has a 1/20 chance and Wisconsin has a 1/50 chance, Kentucky’s value will be LN(20)=2.995 points and Wisconsin’s will be LN(50)=3.912 points. We use a log scale because some teams will have absurd longshot odds, and the log scale means that when – just picking a team at random, here – Michigan’s odds are ultimately revealed to be 1/2500, their assigned point value will be LN(2500)=7.824.
2. A team is awarded their point total for every win, such that their entire value is the product of the point value multiplied by their win total. This yields some interesting effects inasmuch as, using Kentucky and Wisconsin again, three Wisconsin wins has roughly the same value four Kentucky wins (3*3.912~4*2.995).
3. Finally – and this is where things get really interesting – a portfolio of teams must be selected. Brackets will assign a portfolio weight to however many teams they want, so long as the percentages add up to 100%. As an example, if you place 5% of your portfolio on Kentucky and they won 4 games, the bracket would be awarded LN(20)*4 wins*5% allocation = .599 points.
To join the fun, please register by visiting here. After the field is announced, we’ll email you the submission template to complete and return to us.
As in investing, you get to select a portfolio of teams, using risky, hedged, concentrated or diversified portfolios, and if we’re lucky enough to have a large dataset, we suspect some interesting patterns will emerge.
That said, as with all March Madness pools, there will be a certain amount of people who submit chalk brackets. And while there exists no specific rule against these submissions, it’s a generally accepted principle that such submissions are the exclusive purview of cranks, curmudgeons and cowards!
And so, to save everyone the embarrassment, we thought it would be a useful service to lay out the March Madness portfolios – under our rules – that would be considered “chalk” submissions. Basically, in our post-tournament wrap-up, these are going to be the benchmarks against we will judge the performance of the entire pool of entrants.
1. Equal Weight Portfolio. This portfolio allocates equal weight to every team. This is a reasonable starting point for people who feel they have no informational advantage.
2. Rank Weight Portfolio. This portfolio allocates across all 64 teams in proportion to the seeding (top seeds are more heavily weighted).
3. Hot-Hand Portfolio. This portfolio will allocate equally to the “power conferences” champions (Big 12, Pac 12, ACC, Big East, Big Ten, and SEC), regardless of region or seed. This idea here is that most of them won a conference tournament, and would be heading into the tournament with some positive momentum.
4. Concentrated Portfolio. This portfolio will allocate equally to the top 2 seeds in each region.
5. Rank-Seed Weight. This portfolio will rank weight the top 4 seeds in each region.
6. Potential Point Weight. This portfolio will weight team in direct proportion to the total points a team would accrue from winning the championship. Heuristically, the idea here would be to target equal expected points from every team in the field.
And ya know what? Just for kicks:
7. The 12-seed Equal Weight Portfolio. Because 12-seeds always seem to punch above their weight.
So, there ya go. Chalk submissions beware: our March Madness challenge is not for the feint of hear!
Again, to join the fun, please register by visiting here.
(SCHEDULING NOTE: The 2016 Tournament field will be announced on March 13. We will send you the submission spreadsheet via email on March 14, which may or may not include the garbage teams participating in the “First 4” games on March 15 and 16. The first round begins March 17, and your portfolio submissions will be due by 11:59PM EST on March 16.)