Is This Madness? How Losing by Just a Little Can Help a Team -- or Company -- Win

March 17 was the first day of "March Madness" in the United States, a two-week period in which 64 college basketball teams vie for the National Collegiate Athletic Association championship in a tournament that rivals the World Cup in fan frenzy. It was also the deadline for an estimated 37 million Americans to place bets on the outcome of the tournament -- not just the ultimate champion, but the winner of every game in every round. For a fee, participants in the betting can compete with pools of co-workers or other informal groups to see who has the most accurate picks. The winners get the pool of money generated by the entry fees.
That means an entry with just a few bad picks in the first round of the tournament is probably doomed to fail. But what if one of the betting participants could know in advance which teams would be leading at halftime in those first-round games? The logical move in that situation is to pick the team that's winning, right?
Maybe not. According to recent research by a pair of Wharton professors, teams that trail by a little at the half actually have a better chance of winning the game than the squad in the lead.
Wharton marketing professor Jonah Berger and Devin Pope, a professor of operations and information management, found that teams which were slightly behind at the half won more often than they lost. Their research paper, which is based in part on the results of more than 6,000 recent college basketball games, is titled: "When Losing Leads to Winning."


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