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 current round's match-ups. It is interesting that our financial marketplace model produced probabilities similar to projections from various sources. 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: Elite 8 Final Prices
(Proxy for Probability of Advancing to Next Round)
Kansas 72%
VCU 28%
Arizona 55%
U-Conn 45%
North Carolina 52%
Kentucky 48%
Florida 57%
Butler 43%
