by Misha Lepetic
“Is it the media that induce fascination in the masses,
or is it the masses who direct the media into the spectacle?”
~Baudrillard
I was reminded of the perceived satisfactions of participating in games of chance with hopeless odds after hearing a recent piece on NPR discussing quite the prize: a cool $1 billion dollars for anyone who nailed a 'perfect bracket.' In other words, the accurate identification of the outcomes of all 63 games of the NCAA men's basketball playoffs. Sponsored by a seemingly oddball trinity of Warren Buffett, Quicken Loans and Yahoo!, the prize is, on the face of it, an exercise in absurdity. But its construction is superb, and worth examining further, for reasons that have little to do with basketball, or probability, but rather for the questions it provokes around the value of information.
Now, bracket competitions have been going on at least since the tournament itself, which kicked off in 1939. Although brackets are common for other sports, there are unlikely subjects, too: saints and philosophers both have been thrown into pitched, single-elimination battle. But the NCAA bracket holds pride of place, not least because the number of participating teams is much greater than most other playoffs. This leads to the absolutely astonishing odds: if each game is treated as an independent coin toss, the odds of a perfect bracket are 1 in 9.2 quintillion, a number that even Neil DeGrasse Tyson might have difficulty contextualizing for us. Of course, the distribution of the initial round favors higher-seeded teams, so barring any first-round upsets, our chances may improve to a balmy 1 in 128 billion.
So we have at least an answer to the initial question of “What odds would make you feel comfortable enough to put up $1 billion?” Of course, if someone had won, Warren Buffett, whose net worth clocks in at about $60 billion these days, would have been on the hook, or rather his firm Berkshire Hathaway, whose market cap is five times the size of Buffett's wealth. (I mention both Buffett and his company because Buffett has thrown in a classic game theory move: he is willing to buy out anyone with a perfect bracket going into the Final Four for, say, $100 million.) In any event, it certainly would have been worth seeing the avuncular Oracle of Omaha show up at the door of the lucky winner with a giant cardboard check, just like Ed McMahon used to do with the Publishers Clearing House Sweepstakes. But if the chances of winning are nearly impossible, and there is no cost to enter the contest, we are left with a head-scratcher: who benefits?
And there is. Recall the three sponsors of our prize: Berkshire Hathaway, Yahoo! and Quicken Loans. In order to enter the competition, prospective bracketologists (that's a real word) had to visit a Yahoo! page, where they had to first open a Yahoo! account and then fill out a detailed Quicken questionnaire which elicited not just their name, home address, email and phone number, but much more importantly, if they own their home, or plan to purchase one in the future, and, if they own one, the current interest rate on the mortgage. For its part, Berkshire Hathaway receives a fee from Quicken and Yahoo! for insuring the competition, ie, in case the payout actually happens, which never will. Everyone's a winner, baby.
The benefit to these entities – particularly to Quicken, which specializes in mortgage lending – becomes apparent when one combines the quality of the information with the scale of participation. Concerning information, Slate, in one of the few clear-eyed articles on the matter, quotes a mortgage investment banker as saying that “it's not uncommon for companies like Quicken to pay between $50 and $300 for a single high-quality mortgage lead.” While Quicken's spokespeople have been at pains to point out that only people who ask will be contacted, the fact is that all of the information on the entry form is required, which allows Quicken to create a massive database from which it can model all sorts of trends and behaviors.
For its part, Yahoo! gains an equivalent number of users. Obviously, some will already be Yahoo! accountholders, but even if we assume that only half are new users, that is still 5 million fresh fish to subject to new ads, at least for a time. Berkshire Hathaway's benefit, aside from the insurance fee, is less clear, but the language in the contest rules leaves wide open the opportunity for sharing information between Quicken and the conglomerate (and if you have any doubts about the spurious protections afforded by these agreements, have a look at this 60 Minutes report).
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So what? People are always giving away something in the hopes that they will gain something that is, in their perception, of even greater value. In the case of the Buffett bracket, even if what they finally get is nothing, I suspect there is still a pleasure in the act of playing – in other words, a bribe. But before discussing bribery, what interests me is the change in what's considered a fair trade. Any economist will maintain that a trade made without coercion is a fair trade, with the libertarian corollary being that people should not be protected from the consequences of their greed and/or stupidity.
But Western law has tended to draw the line at varying points. Nigerian letter scams and boiler room pump-and-dump schemes are illegal precisely because society has decided that there is a point beyond which people need to be protected from their cupidity. And the terms of engagement and success for the Buffett bracket are rather clear: in this sense, the contest is neither a fraud nor a scam. You pay to play, in a way that may not seem obvious or even harmful. But what is not transparent is the purposes for which that data is used, beyond the immediate consequence of the generation of consent, or the persistence of this data. Would people change the way they thought about giving up this information if they knew of the enormous subterranean infrastructure that trafficks in their personal details? Would they value it more? But if there are no mechanisms of valuation (ok, fine: free markets) that make the worth of this information apparent, how do we approach this?
On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.
In the Buffett bracket we have the resolution of this paradox – of how what is free (as in costless) is transmuted into value (something that is otherwise expensive to obtain). It is quite clear to whom the information is valuable, and the generation of this value is only possible through the vast systems that aggregate millions of bits of data into models that determine and predict behavior, ultimately driving profit. It is also quite clear how lowering the cost of getting information into the system makes it free (again, as in costless). What the internet and the accompanying utter lack of regulation enable is the hyperefficient siphoning off of that information from any willing individual who hasn't the means to determine what his information might actually be worth – which is pretty much no one. As a further consideration, note that most people will forget they entered the contest within weeks of the tournament's end, but that there are no provisions for their information's expiration. We may be done playing the bracket, but the traces of data that we leave behind are never forgotten.
The problem with this analysis (aside from its melodramatic nature) is that it incomplete. There is no resolution at this moment. Regulation that would give private citizens the right to use their information as an object of the commodity economy (ie, for lease as well as for sale) versus the current state, where it has by default fallen into the realm of the gift economy, is about as likely as a perfect bracket. The best that thinkers such as Jaron Lanier – who has written extensively on the subject – can seem to come up with is a system of micropayments, but the problem with technologists is that they tend to have a dismal grasp of the dismal science. In the meantime, what continues to take place is not so much a fraud or a scam, but really a sort of bribery. As automation continues to replace middle class jobs, we are being bribed for what little we have left that is uniquely our own, and, it being of such little worth to us, we find ourselves willingly trading it for the privilege of, as Žižek says, having “an experience” – in this case, the non-chance to win a billion dollars. This is the heart of ideology, in that it does not need to hide itself. After all, Slate and NPR both published insightful articles on the Buffett bracket and what it meant for participants. There is no need to obfuscate the truth, as it is much more useful for large network actors to be (sufficiently) open about their motives and desires. One doesn't have to look very hard to see that the old Wall Street adage – “They take your money and their experience, and turn it into their money and your experience” – has never been more true, or more subtle, since you are brought to believe that you never had the money in the first place.
So what about the state of the Buffett bracket? Sadly enough, no one made it past the first two days of competition. As fate would have it, the first round saw 14th seed Mercer upsetting 3rd seed Duke, which wiped out a large swathe of punters. Better luck next year, kids. In the meantime, the folks at Quicken have a lot of phone calls to make, and I need to go to the corner store to pick up a fresh pack of smokes. I sometimes think about picking up a lottery ticket while I'm at the counter, too, but somehow never seem to get around to it.