MARCH MADNESS - STRATEGIC BEHAVIOR IN NCAA BASKETBALL TOURNAMENT BETTING POOLS

This paper uses data from the natural experiment of NCAA Basketball To urnament: ''betting pools'' in a descriptive study of strategic behavi or. The observed behavior in these pools differs from equilibrium beha vior in a robust manner; betters overback the heaviest favorites. The size of this bias falls slightly in larger pools, where the induced pr ofit opportunities are higher than in smaller pools. This indicates th at a small number of players are adjusting their behavior to reflect t he changing strategic situation, while the aggregate behavior remains away from equilibrium.