The Financial Markets Program at the University of Chicago - together with Carlton Chin, a fund manager - devised a March Madness pool -- that models each game as a financial marketplace. The pool is being run "round-by-round" so it can generate fresh pricing as each round develops.
The points awarded for correct selections -- are based on market participant entries. As a result, the final price for each game can be used as a proxy for the probability of a team advancing to the next round. Below is a table that shows the final pricing for the first round's match-ups. It is interesting that our financial marketplace model produced probabilities similar to projections from various sources, including the New York Times 538 forecast -- even with a relatively small sample size of just under 40 data points. The pool is designed to study:
- Financial marketplaces and market pricing.
- Ideas of game theory.
- Concepts of contrarian methods.
For more information - please visit the March Madness link at CARATcapital.com. Please also visit this summary of the March Madness Pool.
Financial Markets Program: First Round Final Prices
(Proxy for Probability of Advancing to Next Round)
Region | Seed | Team | Official Final Price (1st Rd) |
SW | 1 | Kansas | 94.80 |
SW | 16 | Boston U | 5.20 |
SW | 8 | UNLV | 52.20 |
SW | 9 | Illinois | 47.80 |
SW | 5 | Vanderbilt | 53.20 |
SW | 12 | Richmond | 46.80 |
SW | 4 | Louisville | 83.90 |
SW | 13 | Morehead St | 16.10 |
SW | 6 | Georgetown | 65.60 |
SW | 11 | TBD | 34.40 |
SW | 3 | Purdue | 89.25 |
SW | 14 | St. Peters | 10.75 |
SW | 7 | Texas A&M | 44.40 |
SW | 10 | Florida St | 55.60 |
SW | 2 | Notre Dame | 90.10 |
SW | 15 | Akron | 9.90 |
W | 1 | Duke | 92.95 |
W | 16 | Hampton | 7.05 |
W | 8 | Michigan | 43.05 |
W | 9 | Tennessee | 56.95 |
W | 5 | Arizona | 66.95 |
W | 12 | Memphis | 33.05 |
W | 4 | Texas | 77.65 |
W | 13 | Oakland | 22.35 |
W | 6 | Cincinnati | 40.20 |
W | 11 | Missouri | 59.80 |
W | 3 | Connecticut | 85.40 |
W | 14 | Bucknell | 14.60 |
W | 7 | Temple | 50.10 |
W | 10 | Penn St | 49.90 |
W | 2 | San Diego St | 90.25 |
W | 15 | No. Colorado | 9.75 |
E | 1 | Ohio St | 93.95 |
E | 16 | Play-in Winner | 6.05 |
E | 8 | George Mason | 47.60 |
E | 9 | Villanova | 52.40 |
E | 5 | West Virginia | 75.35 |
E | 12 | Play-in Winner | 24.65 |
E | 4 | Kentucky | 86.90 |
E | 13 | Princeton | 13.10 |
E | 6 | Xavier | 48.95 |
E | 11 | Marquette | 51.05 |
E | 3 | Syracuse | 83.55 |
E | 14 | Indiana St | 16.45 |
E | 7 | Washington | 60.20 |
E | 10 | Georgia | 39.80 |
E | 2 | North Carolina | 94.30 |
E | 15 | Long Island | 5.70 |
SE | 1 | Pittsburgh | 92.45 |
SE | 16 | TBD | 7.55 |
SE | 8 | Butler | 42.20 |
SE | 9 | Old Dominion | 57.80 |
SE | 5 | Kansas St | 47.75 |
SE | 12 | Utah St | 52.25 |
SE | 4 | Wisconsin | 64.60 |
SE | 13 | Belmont | 35.40 |
SE | 6 | St. Johns | 50.30 |
SE | 11 | Gonzaga | 49.70 |
SE | 3 | BYU | 78.20 |
SE | 14 | Wofford | 21.80 |
SE | 7 | UCLA | 45.95 |
SE | 10 | Michigan St | 54.05 |
SE | 2 | Florida | 93.15 |
SE | 15 | UC Santa Barb | 6.85 |
