What’s Warren Buffett’s $1 Billion Basketball Bet Worth? by Corey Chivers.
From the post:
A friend of mine just alerted me to a story on NPR describing a prize on offer from Warren Buffett and Quicken Loans. The prize is a billion dollars (1B USD) for correctly predicting all 63 games in the men’s Division I college basketball tournament this March. The facebook page announcing the contest puts the odds at 1:9,223,372,036,854,775,808, which they note “may vary depending upon the knowledge and skill of entrant”.
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Corey has some R code for you to do your own analysis based on the skill level of the bettors.
But, while I was thinking about yesterday’s post: Want to win $1,000,000,000 (yes, that’s one billion dollars)?, it occurred to me that the common view of this wager is from a potential winner.
What does this bet look like from Warren Buffet/Quicken Loan point of view?
To be eligible for the $1 billion grand prize, entrants must be 21 years of age, a U.S. citizen and one of the first 10 million to register for the contest. At its sole discretion, Quicken Loans reserves the right and option to expand the entry pool to a larger number of entrants. Submissions will be limited to a total of one per household. (emphasis added)
Only ten million outcomes out of 9,223,372,036,854,775,808 outcomes or 0.00000000010842% of the possible outcomes will be wagered.
$1 Billion is a lot to wager but with wagered outcomes at 0.00000000010842% that leaves 99.9999999998158% of outcomes not wagered.
Remember in multi-player games to consider not only your odds but the odds of others. only the odds that interest you but the odds facing other players.
Thoughts on the probability the tournament outcome will be in the outcomes not wagered?
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