I’ve spent the past hour in awe of the excellent marketing during the first four days of “March Madness” done by Quicken Loans with their “billion-dollar” promotion that has gotten a lot of attention since this past Thursday. For people who are interested in Charlie Munger’s mental models and love to study how psychology affects society’s perception of things, the Quicken Loans billion-dollar bracket gives us a lot of lessons.

First off, it plays to people’s basic notions to think in terms of “larger reward must be better” rather than calculating the expected payoff of something. Sure, the ultimate reward is $1 billion if your bracket is perfect, but you have to adjust it for the fact that the odds of getting a bracket right are 9.2 quintillion to 1 (actually, your odds are a little better than that because the quintillion figure assumes that every team has an equal … Read the rest of this article!