The Overestimation Phenomenon in a Skill-Based Gaming Context: The Case of March Madness Pools
Over 100 million people are estimated to take part in the NCAA Men’s Basketball Tournament Championship bracket contests. However, relatively little is known about consumer behavior in skill-based gaming situations (e.g., sports betting). In two studies, we investigated the overestimation phenomenon in the “March Madness” context. In Study 1 (N = 81), we found that individuals who were allowed to make their own predictions were significantly more optimistic about their performance than individuals who did not make their own selections. In Study 2 (N = 197), all subjects participated in a mock competitive bracket pool. In line with the illusion of control theory, results showed that higher self-ratings of probability of winning significantly increased maximum willingness to wager but did not improve actual performance. Lastly, perceptions of high probability of winning significantly contributed to consumers’ enjoyment and willingness to participate in a bracket pool in the future.