Friday, March 21, 2014

PAGING DR. EVIL:  There were, after last check, only viable sixteen entries remaining in the Warren Buffett Billion Dollar Bracket Challenge (now none), which raises a pretty fantastic question: suppose it's the Final Four, so you're now three games away from $1,000,000,000.00.  Given that you've mathematically got a 1-in-8 shot to win it, in theory $125 million would be a fair offer for Buffett to buy you out. Suppose Buffett instead offers you $25 million, or less? How low would you go in accepting an offer?

Explain your reasoning; show all work.


  1. sconstant6:53 PM

    He's assuming it's just me and him all alone in the world. I'd find someone else(s) willing to buy/invest in my share. Once there's someone in the equation for whom a 1/8 chance at $125M would be worth more than $25M, I no longer need to accept $25M. Or as such someone else(s) are wont to say: I win to that.

  2. victoria7:24 PM

    I'd accept a $25 million payout because the marginal utility of anything above that is nil to me. $25 million and I'm financially independent for life.

  3. Buffett has already said he'd buy you out at $100M, and I'd certainly take that offer. I thought the guy with the longshot championship ticket for Auburn was an idiot for not hedging his bet once they reached the championship.

  4. Jordan8:39 PM

    Not a chance. I don't think I've hit more than 10 Sweet 16 teams or two Final Four teams. If I'm hitting every single pick, I'm confident I can hit the easy ones.

  5. I am quite confident that the Bracket Challenge was insured in some way other than just "we have a cash reserve"--would be interesting to see what sort of premium Berkshire Hathaway paid for it.

  6. Adam C.1:38 PM

    Well, now it's a moo point.