Posted by Doug on March 15, 2007
On Monday I offered a few thoughts about how to fill in your tournament brackets.
My interest in the issue is mainly theoretical (I am a mathematician, after all). If the entries in your pool satisfy a certain assumption, then it's reasonable to conclude something about your optimal strategy. It's an interesting mathematical problem with what I think is an elegant solution. But I have to admit that, other than just making sure it passed the sniff test, I didn't give a whole lot of thought to the reasonableness of the assumption.
Blog reader Patrick L. sent me some data from his office pool which indicates that people tend to overbet high seeds in these pools. This is the percentage of people whose entry includes a national champion of the given seed. OP is Patrick's office pool, TS is the implied probabilities from tradesports.com, and Hist is the historical frequencies:
OP TS Hist
#1 seeds 59% 53% 55%
#2 seeds 38% 23% 18%
everyone else 3% 24% 27%
Also, Yahoo's contest entry distributions are now posted, and they are even heavier on #1 seeds: 64/23/13.
In light of this, Patrick suggests that picking a #3 or #4 seed to win it all may be the optimal strategy. That seems believable to me.
Yahoo's distributions show further evidence of overbetting on favorites. Texas was picked in the first round by 97% of yahoo's entrants, whereas the Vegas odds imply that they have only about a 79% chance of beating New Mexico State. Virginia Tech (a #5 seed) was picked by 71% of the entrants over Illinois (#12) despite only having a 57% chance of winning according to the Vegas odds. The former is probably due to Kevin Durant's likeness being plastered all over everything for the last few weeks. The latter is probably due to an over-reliance on seedings instead of other objective measures like computer rankings or Vegas lines, as was mentioned in the comments to Monday's post.