March 25, 2021 Reading Time: 2 minutes

Sports make a lot more sense when you realize the goal is to maximize profit, and that isn’t always done by crowning the best team champion. That’s a reasonably likely outcome in sports like basketball and hockey, where there are large playoff fields (sixteen teams) and advancing from one round to the next requires winning a best-of-seven series. The NCAA tournament, however, is designed to capitalize on randomness—March Madness, as it were.

As I drafted this piece, #8 seed Loyola Chicago was about to vanquish #1 seed Illinois and take a spot in the Sweet Sixteen. Would they beat Illinois in a seven-game series? I doubt it, but March Madness isn’t about crowning the best team. It’s about creating a fantastic entertainment product that capitalizes on one of history’s most venerable narratives: David v. Goliath. The Little Guy who shouldn’t have a chance beating the Big Guy. It’s a brilliant strategy that creates exposure for small teams that win big games. Much to the consternation of my friends who are Bobcats, I suspect there are a lot of people who wouldn’t have known there is an Ohio University in addition to Ohio State were it not for their NCAA performance. And speaking of Ohio State, how many people had ever heard of Oral Roberts University before they knocked off OSU—and now Florida to become only the second #15 seed to advance to the Sweet Sixteen? Or had heard of Abilene Christian University before they knocked off Texas? Or had heard of Iona College before they gave Alabama a run for their money? 

In 2013, I was at a conference during the first round of the tournament. and owed Forbes an article. I turned on the TV in my hotel room having watched essentially no college basketball all year and saw that #15 seeded Florida Gulf Coast University was looking like they were going to beat mighty #2 seeded Georgetown. I have a lot of friends who teach at FGCU (or who have taught at FGCU) and at the time worked for a Dean who used to be a member of their faculty. I dashed off a quick article about FGCU’s economics department and submitted it as soon as the game was over.

There’s a reason vasectomies spike during March Madness: David going toe-to-toe with Goliath makes for great TV, and improbable runs like George Mason’s Final Four appearance in 2006, Loyola Chicago’s Final Four run in 2018, and Villanova’s ascent from #8 seed to tournament champions in 1985 are called “Cinderella stories” for a reason. People love compelling stories. March Madness offers them in spades.

Reprinted from Forbes

Art Carden

Art Carden

Art Carden is a Senior Fellow at the American Institute for Economic Research. He is also an Associate Professor of Economics at Samford University in Birmingham, Alabama and a Research Fellow at the Independent Institute.

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