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Buffett's billion-dollar bluff
March 18, 2014 - Jim Anderson
“If you get to the Final Four with a perfect bracket, I may buy you out of your position. I'll make you an offer you can’t refuse.”
So says Warren Buffet, whose company is offering $1 billion for picking a perfect NCAA bracket.
According to people who are good at math, even if you’re a whiz at picking college basketball winners, the odds against perfection in predicting the NCAA tourney are more than a billion to one. If you let your cockatoo do the picking, the odds are 9.2 quintillion to one.
Still, the idea of being bought out by Buffett during the Final Four is intriguing. (For a basketball genius, the odds of getting that far might be closer to the range of winning Powerball with a single ticket.) At that point in the contest, with three games remaining, the odds against finishing perfect would be about eight to one.
So how big would Buffett’s “deal or no deal” offer to a contestant entering the Final Four with a perfect bracket actually have to be? If he were being fair, it should be in the range of $125 million.
But how much would he really have to offer?
If you’re facing the prospect of winning $1 billion ... or zilch ... how much would it take for you to say “Deal.”
Who among us would have the nerve to turn down a low-ball offer of, say, a few million dollars?
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