Abstract

In this classroom exercise, instructors use the NCAA basketball tournament to help teach important concepts in auction theory, risk management, and portfolio theory. Students represent different athletic apparel companies vying for the sponsorship rights to NCAA tournament teams. Each NCAA team places its sponsorship rights on the auction block. The value of these rights is determined by exposure in the NCAA tournament. Risk management is examined by allowing students to diversify their portfolios by buying and selling full or partial shares of the sponsorship rights. The exercise simulates the many phenomena associated with auctions of commodities with unknown values.

Recommended Citation

Einolf, Karl W. (2006) "March Madness in the Classroom," Journal of Industrial Organization Education: Vol. 1 : Iss. 1, Article 3.
Available at: http://www.bepress.com/jioe/vol1/iss1/3

Related Files

einolf_exerciseinstructions.pdf (28 kB)
Exercise instructions
einolf_spreadsheet.xls (299 kB)
Spreadsheet
einolf_results_spreadsheet.xls (27 kB)
Results spreadsheet