The Role of Luck in Life Is Still Misunderstood

http://joshuaballoch.github.io/luck-in-life-still-misunderstood

by jbtca • 8 years ago

191 188 8 years ago

joshuaballoch.github.io

mapcars4• 8 years ago

I'm not quite getting how can you put talent vs luck, when talent is based on luck you got from your genes, parents, environment etc.

I see it as the same thing.

BerislavLopac• 8 years ago

You can look at it as grouping your personal "luck" around the most important event in your life -- your conception.

rptv• 8 years ago

Well, sure. You have your luck as determined at conception, your luck of upbringing, and then your luck as an adult. They're all luck-based, but qualitatively different.

ska2• 8 years ago

Are you then assuming that two people with the same "talent" (your definition) would in probability then have the same outcomes? And the converse? Neither of these things are obviously true in practice, though measurements are admittedly difficult.

mapcars4• 8 years ago

I didn't give any definition to talent, I just said that it is related, very closely, to luck so I don't see how you can oppose them to each other.

I see it similar to asking "what is more important for a fruit - the peel or the meat?" while you can't have one without another, both are there together making a fruit what it is :)

amelius3• 8 years ago

Yes. Therefore, ultimately, in a society without work, wealth should be distributed according to the happiness it delivers. If one person loves reading books and another person loves driving expensive cars, then it's clear how the money should be distributed.

On the other hand, this might take the fun out of driving expensive cars, because in a society with such wealth-distribution, having an expensive car doesn't mean "I'm more successful than you", but rather something like "I have a pathetic need to show off".

KozmoNau712• 8 years ago

It could also mean "I simply enjoy driving cars with a lot of power and/or comfort, because the sensations are inherently pleasurable to me".

I love driving cars. Not to show off or because of prestige, I just really like driving, for some reason. I don't care if it's a 300hp grand tourer or a 60hp supermini, it's the act of driving that's enjoyable to me personally.

Not everything is a matter of "keeping up with the Joneses".

ksec• 8 years ago

I tried to explain ( or briefly mention ) something similar that luck plays apart in one's success in job interviews. I thought I was being humble, and in truth I do think luck plays a part in many ways.

After a few times I stopped mentioning it. It is clear the world doesn't buy this idea.

pcurve• 8 years ago

There's an old saying that goes something like, whether you will be successful in life or not will largely be determined by the following 3 things in the order of importance.

1. What country you were born. 2. What teacher and friends you end up having. 3. Your parents. ($, gene, personality, parenting)

Of course, I would add just random luck as 4th factor.

None of these, you have any control over.

We're all here mostly through our good luck. Yes, some of us work very hard, but so do most people in impoverished countries.

Let's take a minute to count our blessings. :)

projektir4• 8 years ago

0. What species you're born as.

matte_black3• 8 years ago

The original model was so abstracted that it was absurd.

There is no such thing as “luck”, it is only a name for what we call the intersection of preparation and opportunity. Both can be controlled. People tend to think opportunities are random and based on chance – they aren’t. They are the result of smaller intersections of preparations and opportunities that happened previously.

pron10• 8 years ago

For the purpose of this discussion, the precise definition of luck doesn't matter, and can be taken to be anything that isn't talent.

matte_black3• 8 years ago

There is no such thing as talent either.

No one is born with a natural skill to do something unnatural. Genetic traits are not talents, they are traits. To be born with a talent would be to be able to do whatever it is you do from the moment you are born, if you had the physical capacity for it. Otherwise, any “talent” you display later is really just the result of effective learning and practice, but that is just what you would call a skill, there is no need to build it up with all the mythology of “talent”. Just another form of ladder kicking to discourage others from thinking they could achieve that same level of skill.

So if neither definition matters, then in essence this discussion is about nothing.

markshead• 8 years ago

So where would you put what we call "determination?" When someone has 9 businesses/jobs/experiments/etc fail and gets "lucky" with the 10th one, it seems like there is another aspect other than luck and talent.

wiz21c• 8 years ago

https://www.inc.com/minda-zetlin/do-you-need-a-wealthy-backg...

Broken_Hippo• 8 years ago

Call it circumstances you can't control if you want.

People don't choose which country they are born into. They don't choose the quality of their primary education, whether or not their parents vaccinate them before they catch one of those sorts of diseases. They don't choose any disease (cancer, genetic defects, etc) for that matter.

There is a whole range of things most people don't choose. To be a violence victim or in a car accident, for example. Most people can't choose whether or not they will be eligible for an inheritance that makes them better off financially - nor do they choose an inheritance filled with financial obligations.

Sure, some opportunities are the sort that one can do things to make them more likely and choose to take them, but a great number are quite random to the individual and completely outside of their control. Just because they have cause doesn't mean they aren't what most folks consider "luck".

skrebbel• 8 years ago

I'm pretty proud of the careful preparation I did that led me to be born in the Netherlands.

mapcars4• 8 years ago

ha-ha, I'm grateful to all the luck which resulting me living in the Netherlands :)

barrkel• 8 years ago

If someone gets killed in a plane crash, which intersection of preparation and opportunity caused that?

Or was it just bad luck?

fenwick67• 8 years ago

They should have prepared better by bringing a parachute \s

thanatropism4• 8 years ago

I still think the focus on wealth/income inequality rather than on absolute poverty is irrational. I've seen people justify it to me on the grounds that people care about relative poverty, which to me reads "people are jealous". But then the result is:

1) A focus on inequality is irrational. 2) People focus on inequality for irrational reasons.

This means that if policy-makers and intellectuals fully give in to the people's wishes, we'll accept decreases in wealth in exchange for more equality indefinitely. If this sounds like a strawman, it's because we have "backstops" to inequality-decreasing wealth-destruction. But why should we tolerate any wealth destruction at all?

And if reducing inequality is possible without wealth destruction, why focus on inequality?

(This is besides the "Oxfam problem" -- there never is a coherent definition of "wealth" and Oxfam never seems to fully value people's homes and work animals and suchlike in poor countries.)

pron10• 8 years ago

The reason we care so much about inequality has nothing to do with jealousy and everything to do with power[1]. As resources are a major source of power (and often vice-versa), and because power is relative, inequality of resources means inequality of power. And as power means influence (and so the ability to reduce another's freedom), inequality reduces overall freedom.

As freedom can never be total[2], the question is do we prefer to reduce the freedom of the powerful few (whose freedom is already large) in order to increase that of the many, or vice-versa?

So while absolute income is certainly very important, ignoring inequality is simply irrational for someone who values freedom.

[1] https://en.wikipedia.org/wiki/Power_(social_and_political)

[2]: One person can be totally free; two cannot. X would either be free to infringe on Y's freedom or not -- in either case, freedom is no longer total.

thanatropism4• 8 years ago

This is an interesting answer. But I'm not sure if inequality-of-power-driven-by-inequality-of-wealth can be problematized (put into the discussion and on the agenda) and fought in such a way that equalizes power. We're shuffling power around and the dynamics of power inequality aren't clear at all.

aje40312• 8 years ago

This is a distortion.

Young men see rich men with beautiful women flying to anywhere they want on the planet. Only a few of them will get that when they're older, and it oftens boils down to intelligence, work ethic, cleverness, other abilities like athletics and looks, and a few lucky breaks that they take advantage of. Exceptions being inherited wealth. Law of averages, those who do make it are hard working and intelligent. Law of averages, those who do not are often less so. However, everyone still wants the hot girl and the jet. So what's the right thing to do? Take "power" from [Hard working and intelligent]U[Scott Disick, Donald JR] to normalize influence across everyone? Should the group, who by and large, has contributed more to the society not have proportionally more say? And then the issue becomes more nuanced when you take into account inheritance and things of that nature.

fvdessen• 8 years ago

Why should power and freedom be distributed equally rather than proportional to competence and virtue ?

aje40312• 8 years ago

I agree with you completely. I got downvoted on a thread several weeks ago for finding issue in the US placing below Mexico on a "(relative) child poverty" measure. Regardless of whether their methodology or even results are correct - I think it's guaranteed that many readers will distort that information and propagate that distortion onward.

But, pardon my cynicism and condescension, but, try arguing that with a group of social scientists/mathematicians doing null hypothesis papers with p-values at 1 SD, as well as with people, who frankly, are jealous of others and want more.

Unfortunately, on the flip side, I think there is still a "how big can my neighbor's house get relative to mine before I consider organizing a mob to break into it and steal all the jewels" element to human nature and society.

KozmoNau712• 8 years ago

people, who frankly, are jealous of others and want more.

That's always what it boils down to, isn't it? The one argument the hardcore libertarians and FYGM people always fall back to is "well, you're just jealous. If you just worked harder, you could afford it too", which has been shown again and again to be blatantly false and a clear example of a just world fallacy.

Luck plays an enormous part in how successful you are in life. There is obviously also a factor of being able to do something with those instances of luck, and again being born into the right family, having gone to the right school or having had the right encouragement is a huge factor. Once again, it boils down to luck, especially being born into the right family, with resources and support and an already-in-place social network to groom you and give you those opportunities.

Do you think the son of an alcoholic single mother has the same chances in life as the son of a bank director?

Social mobility is possible, but the deck is severely stacked in favor of those who already have the most.

dominotw• 8 years ago

Same reason we hate google/amazon or any other (almost) monopolies. Money buys speech, power, influence, mind control. There is a reason rich contribute so much to political campaign donations.

noelwelsh6• 8 years ago

Unfortunately, human society is made up of humans, irrational though they may be. A high degree of inequality usually indicates one of two things: a dictatorship, or a society that is liable to vote in populist leaders (and hence potentially turn into a dictatorship). An highly unequal society is not a healthy society.

maxxxxx3• 8 years ago

"An highly unequal society is not a healthy society."

That's the most important point. If people stop feeling that they have a part of growth in the economy they stop engaging and a country loses cohesion.

frgtpsswrdlame5• 8 years ago

Inequality is intensely tied to social mobility. Check out the Great Gatsby Curve or this talk on snowball inequality. The common sense way to think of it is that as the rich entrench themselves further and further apart from the rest of us, it becomes harder and harder to jump the gap, the rich stay rich, the poor stay poor and we move from meritocracy to aristocracy.

https://en.wikipedia.org/wiki/Great_Gatsby_curve

https://voicerepublic.com/talks/snowball-inequality-meritocr...

KozmoNau712• 8 years ago

I would say we have already reestablished a de facto aristocracy.

The richest live like kings. Actually they enjoy a level of luxury that even the richest kings of old couldn't possibly have imagined. They basically live like gods, with virtually unchecked power, influence and wealth.

For one of the more extreme examples, consider this private dwelling: https://en.wikipedia.org/wiki/Antilia_(building)

It is possibly the most lavish private home in the world, and it overlooks the absolutely crushing poverty of Mumbai's worst slums. The sheer level of cognitive dissonance is mindboggling.

fjsolwmv5• 8 years ago

The word meritocracy was invented as a sarcr term to describe aristocracy wearing false dressing of equal opportunity. That's why people clamoring for "meritocracy" today are looked down upon for their self-unawareness.

https://en.m.wikipedia.org/wiki/Meritocracy

gameswithgo• 8 years ago

we'll accept decreases in wealth in exchange for more equality indefinitely.

That doesn't necessarily follow, I imagine that there is a level of inequality where total wealth, or at least total utility, even for the rich, starts to go down. For instance once you start having to go to private school, and live in a walled off community to keep the unwashed proletariat out so they don't steal from you / kill you.

You have to accept that people are irrational and deal with it, or modify them genetically.

fjsolwmv5• 8 years ago

We already tried genetically cleansing away the lower classes. No thank you.

drieddust4• 8 years ago

How that is possible when inflation adjusted wages have stayed flat lined or decreased?

I thought wealth follows power law which means eventually it concentrates so much that poor becomes poorer in absolute sense.

stewbrew• 8 years ago

The focus on inequality is irrational only for rich people or machines. Humans are social beings right from the start. You always compare yourself to others. Given that wealth mostly depends on your birth and not on your efforts given your resources, the focus on inequality is very rational.

psyc• 8 years ago

Poor people in the US often lead nightmarishly stressful daily lives to make ends meet, having to work long hours doing self-destructive jobs, and being ever exposed to ruin by chance events. Their likelihood of achieving peace and happiness is quite orthogonal to whether they have plumbing, refrigeration, TVs and smartphones. It need not have anything to do with jealousy.

pdubbs903• 8 years ago

"People are jealous" seems to me like the uncharitable formulation. I'd phrase it more along the lines of: "we evolved in small tribes and are more acutely aware of relative status than absolute welfare." Most people's assessment of how well off they are comes from comparison with their neighbors rather than absolute knowledge of weather they have enough.

I agree though that eliminating severe poverty is a more worthy humanitarian goal than trying to produce equity.

naasking5• 8 years ago

It could be that the results were built into the model’s design.

Every true mathematical proposition is a tautology. I don't find this point particularly convincing. As long as the model's predictions match reality in interesting ways, it can lend possible insights on why reality might have certain characteristics.

Like getting an improbable series of heads when flipping a coin long enough, improbable clusters of events are bound to occur for at least some agents in a large enough set.

Yes, but what's alarming is how most agents' capital fell from bad luck alone, and how good luck only seemed to benefit a very small subset of the population, and talent was not any kind of guarantee. These characteristics of life are denied by many people, so to see it reflected in such a simple model is, I hope, instructive.

Why should capital growth only occur on chance events, when most workers are paid wages in exchange for their work?

The way I see it, chance events that exponentially increase wealth drown out one's piddling wages. Wages don't seem particularly relevant to why Warren Buffet and Bill Gates have billions, and many people live paycheck to paycheck.

pron10• 8 years ago

I completely agree with everything you've said. I think that an interesting way to gauge the accuracy of the model without doing major empirical research is to create models where talent is the decisive factor, and then compare which model's assumptions better capture what we know about the world. My guess is that for a variable to be a decisive factor, it must correspond to excessive control over others, thus not matching our colloquial definition of talent, but rather of power.

naasking5• 8 years ago

I think that an interesting way to gauge the accuracy of the model without doing major empirical research is to create models where talent is the decisive factor

Exactly. This paper should be one among many models explored, but it's a good start.

In fact, I'm sure the paper's simulation can be run with a whole variety of parameters for luck's probability, talent, and bad/good luck's effect on capital. We can then see which set of parameters best matches some aspect of reality and possibly gain some new insight there too.

fjsolwmv5• 8 years ago

"empirical research" would be sociology, which a contrarian would reject out of hand.

guiscreenshots• 8 years ago

> It could be that the results were built into the model’s design.
Every true mathematical proposition is a tautology. I don't find this point particularly convincing. As long as the model's predictions match reality in interesting ways, it can lend possible insights on why reality might have certain characteristics.

I think the problem is that nothing about the model lines up with reality. For example:

- Each agent begins with an identical amount of capital. -- nothing like the real world.

- Every 6 months you have the possibility of doubling or halving your capital. -- nothing like the real world.

- Chance of doubling capital is proportional to talent. -- nothing like the real world.

As an argument for such a simple model they provide:

The previous agents’ rules are intentionally simple and can be considered widely shareable, since they are based on the common sense evidence that success, in everyone life, has the property to both grow or decrease very rapidly.

Sure, success/failure _can_ increase or decrease rapidly, but is it the rule? Arguing the basis of your entire model on "common sense" seems weak. It would be better if they had provided at least some real world data where this pattern emerges. In my experience people seem to move a little bit up or down from their baseline, but I have never personally seen a swing from rags to riches or the other way around.

If they had begun by drawing parallels to the ways in which we see the real world and letting the model simulate it into the future it would be more compelling. As it stands, it seems like a set of arbitrary rules designed to reach their desired conclusion, albeit weakly through "it looks pretty similar".

naasking5• 8 years ago

- Each agent begins with an identical amount of capital. -- nothing like the real world.

Not relevant. Part of the main point was that even in the case of equal opportunity/equal starting points, bad luck readily overcomes talent, good luck rewards even the less talented, and so talent isn't any kind of guarantee, contra many people's claims.

- Every 6 months you have the possibility of doubling or halving your capital. -- nothing like the real world.

I don't think this is relevant either. You can pick any progression you want and it won't affect the final results. The point is to simulate regular opportunities of dramatically increasing one's wealth. So again, even when faced with equal opportunity, dramatic wealth inequality just due to luck seems inevitable.

- Chance of doubling capital is proportional to talent. -- nothing like the real world.

The claim that wealth is proportional to "talent" is widely believed. This paper puts it to the test and refutes it. That's one of the main points.

In my experience people seem to move a little bit up or down from their baseline, but I have never personally seen a swing from rags to riches or the other way around.

I addressed this in the post you replied to: small swings up and down are probably wage-driven. This doesn't explain wealth disparity, because dramatic swings in wealth will largely not be wage-driven. These events thus aren't of interest.

If they had begun by drawing parallels to the ways in which we see the real world and letting the model simulate it into the future it would be more compelling.

Not as easy as you think. We have no idea what factors are involved. That's why we study models, and see how closely the results match with reality. That then gives us insight into how some parts of reality might work.

js84• 8 years ago

You listed 3 ways in which the model is "unrealistic". However, it seems to me that neither of the ways that are supposed to be more realistic will actually help the talented against the lucky.

Maybe you disagree and can expand why do you think making things more realistic in some aspect will make it behave better for the talented (especially on the high end of income distribution).

dsacco• 8 years ago

Every true mathematical proposition is a tautology. I don't find this point particularly convincing. As long as the model's predictions match reality in interesting ways, it can lend possible insights on why reality might have certain characteristics.

I don’t really understand what you’re trying to say here, do you mind clarifying? Are you saying you don’t find the point convincing because it’s vacuous?

naasking5• 8 years ago

Are you saying you don’t find the point convincing because it’s vacuous?

I'm saying the article's objection that the "results are built into the design" is indeed vacuous, because this will be true of every mathematical model.

The question is how well the model's results match reality, which can yield insight on reality.

That said, there is of course a "spectrum" of tautologies. Models with simpler input parameters should carry more weight, because they would yield clearer insights and would be easier to match against reality. Models with complex input parameters are not only less likely to match reality, they don't yield much insight into fundamental causes.

Bodhisattya• 8 years ago

But aren't the exceptionally talented(2%) people supposed to win way more than 3%, if we assume talent plays a larger role. It is not a bad output, but not good enough either considering they are exceptional. The paper probably indicates that talent stops becoming the limiting factor somewhere pretty close to average talent, and environmental influences/luck take precedence.

We could argue as to what constitutes luck but I think the core of the paper suggests that talent's importance in success is overestimated, which is rather believable (MY ANECDOTAL OPINION).

Haven't read the paper, just assuming from the articles.

jnordwick2• 8 years ago

R/economics went over this a bit too. There are other issues with the model that and to make it very poor:

- fixed rate of return (doubled or halved) make luck play an oversized role. One of talents greatest contributions is knowing how to let your winners run and cut your losses. The setup is close to a random walk by definition.

- risk reduction is hugely important. High earners especially when speaking of finance tend to know how to reduce risk. Only fools always bet half they capital in every decision.

- talent would understand what events are more likely to succeed than just every event having the same probability.

- talent and preparation generate events. The more you prepare the more chances you'll have available. Most successful people have failed multiple times but keep trying.

- no learning. One of talents great benefits is learning from mistakes. And when combined with increased number of chances that talent provides, this is a critical feedback cycle the model misses.

Basically the model made everybody similar and then had an exponential random function. With such small tails in the talent pool, there is no other decision it could have reached.

jps359• 8 years ago

My favorite novel on the topic is Fooled by Randomness

zzzeek2• 8 years ago

There’s a serious risk of this runaway momentum building an ever-growing chain of misguided agreement.

to think we might alter our society to redistribute wealth to those who are most lacking, lifting people out of poverty and improving the world, when we DIDNT EVEN HAVE TO, turns out those losers were talentless and therefore deserve nothing. Horrifying.

monktastic1• 8 years ago

In that sentence he's talking about the risk of propagating flawed research. A few paragraphs up he makes it clear that he doesn't hold the view you ascribe to him:

I care deeply about the issue of growing wealth inequality, and would love for research to be done that finds concrete evidence of how luck and privilege play a role in it.

zzzeek2• 8 years ago

yeah I don't buy that. Someone looking to identify flawed research can choose from a vast amount of subject areas to focus upon. The research that this person chooses to attempt to debunk is IMO telling.

victor106• 8 years ago

A book I recently read on this topic

https://www.amazon.com/Thinking-Bets-Making-Smarter-Decision...

Really insightful and highly recommended

captainbland• 8 years ago

Indeed, based on the way its rules are set, the high concentrations of capital seem like they were a foregone conclusion.

You could say much the same about modern market economies.

Quarrelsome2• 8 years ago

I think generally modelling life in 2d grid with simplifications such as talent = 0.0 - 1.0 and events doubling or halving capital with a deterministic number of "good/bad" events isn't going to give you anything real as output. I don't like this sort of science, it stinks of foregone conclusion. Running the model itself is irrelevant as the outcome is pretty obvious by the maths put into it.

How far is it really from just writing console.out("my hunches are correct!");

Maybe in a future world of modelling where we feed real-world data into the model then maybe we can get somewhere?

BlackFly• 8 years ago

They introduced talent as a bias in capitalizing on doubling events (the less talent, the less doubling events in proportion). A priori you would consider that this should lead to the talented being overrepresented in the higher percentiles of capital, yet they discover this bias does not dominate over the underlying uniform randomness of merely encountering a doubling event.

So no, I wouldn't say the conclusion is foregone. It shows an example where something that can reasonably be called talent (the ability to capitalize) is not as important as luck (the chance encountering of an event where you can capitalize).

Quarrelsome2• 8 years ago

So no, I wouldn't say the conclusion is foregone.

With the distribution of people and events over space and the distribution of talent the end result was a given because its more likely for an arbitrary person to trigger multiple good events than for very specific "talented" people to trigger multiple good events even if their factor means they don't need as many good events to be "even". Same way that if you had more events then people then the outcome would completely change because then "talent" would become a bigger factor than "finding an event".

Its just about what they decided to make scarce (events) in the model.

xer• 8 years ago

From my experience you can increase your luck in life by exposing yourself to more choices. This can be something as simple as having saved up money so you can quit your job whenever you want to. That in turn gives you the "luck" to get a better job if the opportunity presents itself.

dclowd9901• 8 years ago

I do 100% agree with this, recognizing, of course, that merely being in a position to have choices to begin with is _also_ a factor of luck. (Parents’ socioeconomic status; your own intelligence; if you had someone around to have taught you this, etc)

KozmoNau712• 8 years ago

It is also a matter of having the resources to act on that lucky opportunity.

So it's two-fold, one is that you have the resources to expose yourself to more possibly lucky situations, the second is being able to actually do something about it.

projektir4• 8 years ago

This can be something as simple as having saved up money

You need a huge amount of luck before you can even start doing this.

spicymaki• 8 years ago

America's aversion to the role of luck is based on the Protestant work ethic. There is no chance and everything is predetermined by God's grace. God's grace is demonstrated by hard work, frugality, and discipline. There is a concept of double predetermination where you already need to be saved to be saved. Which means the poor is poor not because of chance, but because they lack God's grace.

eksemplar2• 8 years ago

This is true, but the root of modern democracy has its birth in the same line of hard working and responsible way of living humbly.

fjsolwmv5• 8 years ago

What is modern vs not-modern democracy?

Romans and USAmericans both owned slaves.

aerique• 8 years ago

Convenient.

MadSudaca2• 8 years ago

Excessive belief in luck seems more convenient to me. At least by trying to work hard you're taking responsibility for yourself.

ranie93• 8 years ago

Romans 9:21-23

https://biblia.com/bible/nasb95/Rom%209.21-23

sdhgaiojfsa2• 8 years ago

Be that as it may, this blog is about a specific paper and the strength of its claims. I don't really think puritanism has anything to do with whether this paper's model or inferences are sound.

giardini3• 8 years ago

But puritanism's remains are responsible for many of the opinions critical of the paper's conclusions. Just ask a few wealthy persons about this paper or others like it: they are usually fiercely critical and have bought completely into ideas that support their "blessed" position in society.

athenot• 8 years ago

The irony is not lost on Catholics, who are the recipient of much criticism from Protestants who view "saved by works" as an insult to God's grace. (The theology is actually a mix of both since faith without actions is inconsistent, but I'm refering to the stereotype from the Protestant side.)

ythn• 8 years ago

Let's not throw the baby out with the bathwater...

Yes, we need to get rid of poor shaming, but that doesn't mean we should also get rid of the culture of hard word, frugality, and discipline.

dingbat• 8 years ago

amusing that a comment designed to mock the irrationality and simple-mindedness of "Americans", itself provides a strong example of overgeneralizing entire populations, society and culture into simple, easy-to-understand tropes suitable for simpletons.

agumonkey• 8 years ago

It's funny how old religious ideas are simple observations in a way. By doing something everyday you just accumulate lots of subtle knowledge and roots in any domain. So mathematically you have lots of chances to get it right at one point. More than "luck" to me the main factor is a blend of inner desire and context that allows you just enough time to think and do.

Justsignedup• 8 years ago

Jim Carrey said it best (paraphrased): It is by sheer luck that an opportunity presents itself. But once it does it is up to you to have the means to execute on it, and to execute on it. The good news is that opportunities present themselves often in life. So just get to where you can act on them, and once you see one, act.

jonbarker• 8 years ago

This is all interesting to me. Probably around 40 years ago someone in management decided that certain people were winning the economic game because they were better (meritocracy) and then when we went through a series of technological disruptions we came upon a funny variant which I will attempt to paraphrase "those who are successful are the best at increasing their at-bats and therefore their opportunity to have 'lucky' events." This system seems OK, it selects on people who aren't afraid of failure, and that can't be bad. However, the new problem we have is a situation where there are basically monopolies whose heads still have the 'fail fast' mantra stuck in their heads....

fsiefken• 8 years ago

Long ago I stumbled upon bound copies of the Journal of Parapsychology in the basement of the university library, when looking for written lectures on Nietzsche.

One of the articles was about finding people who attract more good luck and people who attract more bad luck while ruling all kinds of psychological, behavioural or environmental factors. The relevance the authors argued was that persons with bad luck could be screened for to not work for nuclear facilities. I really wanted to find that article again, but the library has been rebuilt and I don't come there often.

drieddust4• 8 years ago

Where Warren Buffet would have landed if he was born in Afghanistan?

I have thought about this question a lot recently without any satisfaction.

mi100hael• 8 years ago

I think Warren still would have done pretty well for himself. Maybe not richest in the world, but he was out selling all manner of things like gum, soda, and golf balls even when he was in primary school. He's a natural entrepreneur.

But Warren is an outlier among outliers. Bill Gates has said himself that he doesn't think he would have been able to become a billionaire with Microsoft had he not gone to a swanky private high school that had a computer back when no one had computers.

0xcde4c3db• 8 years ago

Buffett himself has raised the same point, saying that he won the "ovarian lottery". He doesn't deny that he's uncommonly talented, but readily acknowledges that his particular talents wouldn't be such an advantage if he hadn't been born into a society where they are highly valued.

giardini3• 8 years ago

My tendency is to say "Well, but that didn't happen, so discussing it isn't fruitful."

But counterfactuals seem to be part of our reasoning processes ("If i had turned left at the last light I would be closer to the restaurant.") and they do often capture the imagination (alternative histories, etc.):

https://en.wikipedia.org/wiki/Counterfactual_conditional

drieddust4• 8 years ago

I don't think your argument makes sense given the question.

antisthenes• 8 years ago

That tendency is valid when you're plotting your own future strategy, because you can't go back in time.

However when you're looking at society in aggregate, you have to consider what will happen, so the conversation is still useful when planning for the future (since people will be at different points in their lives) of the group as a whole.

amelius3• 8 years ago

Some time ago there was a post on HN where they had an even simpler model (not based on talent). Everybody was given an equal amount of capital at the start. Then at every tick of the clock, everybody would give 1 dollar to a random person (if they had the money). After many iterations, an exponential wealth distribution resulted.

soVeryTired• 8 years ago

See also, like, every economic model ever.

jungletime• 8 years ago

Seems like this is just measuring a natural effect. The bigger the star, the more mass it has, the more it pulls towards it self. Or the bible version "to those that have more shall be given" The richer you become, the more opportunities you attract to make money.

AndrewSChapman• 8 years ago

Let's face it - how intelligent you are, what if anything you're gifted at, how tenatious you are, where you were born, who your parents are, who you know, what opportunities life presents you, what you enjoy doing, how much you are driven to win... ALL of these things are out of your control. The real falacy is that rich and successful people think they somehow "deserve" their status and that other people just didn't try hard enough. The reality is that life is a random shitshow and the rich / successful have been extremely lucky.

mtreis86• 8 years ago

I am the luckiest. I make my luck. Every bad event brought me here and formed me. Every good thing is mine to enjoy. Whatever happens I will own it. Luck is a lie you tell yourself. But it is a useful lie.

wmsiler• 8 years ago

This is not directly related to this article (which I liked), but instead to the topic in general.

I heard of a study a few years ago where researchers divided a bunch of teenagers into a few groups (each of which was quite large), and each teen was allowed to go to a website and hear a collection of songs (same songs for everyone). Each person could then vote on which was their favorite and, importantly, they could see how many votes that song had already gotten just within their group. The researchers wanted to see if the same songs were picked as the favorite across different, isolated groups. The result was that each group had chosen completely different songs as their favorite. These groups were large enough that they were probably all statistically similar. Once people in a group saw that some song already had a lot of votes, they were more likely to pick it as their favorite as well. This suggests that in the world of pop music, success may have more to do with luck and social influence than with talent.

Ah, I found a link to a description of the study: https://www.npr.org/2014/02/27/282939233/good-art-is-popular...

tokai2• 8 years ago

Sounds like the good old Matthew Effect.

https://en.wikipedia.org/wiki/Matthew_effect

beersigns• 8 years ago

I generally agree we are products of the environment/circumstance we are born into but it's left to your free-will and choice as to how to best persevere in that environment. I've always viewed talent as the tool that enables you to make the best of the environment you are placed in. Chance/opportunity is not a equally distributed resource but by working hard/efficiently you prepare yourself to make the best of the opportunities you are presented with in life. No one is immune to sheer bad luck but if you did everything you could to set yourself up for success, you shouldn't be derided for it.

giardini3• 8 years ago

Instead of wasting time on a (rather biased) critique, read the original paper:

"Talent vs Luck: the role of randomness in success and failure" by A. Pluchino. A. E. Biondo, A. Rapisarda

https://arxiv.org/abs/1802.07068

Are the rich wealthy because they somehow earned it? Examination reveals that this is not true and that the most extreme cases of wealth accumulation (which show a surprisingly consistent pattern across cultures) are attributable more to luck than to skill. Mark Buchanan examines this in his excellent book "The Social Atom" (pp.172-174):

https://www.amazon.com/Social-Atom-Cheaters-Neighbor-Usually...

A reference from that book:

Jean-Philippe Bouchaud and Marc Mezard, "Wealth Condensation in a simple model of economy":

https://arxiv.org/abs/cond-mat/0002374

See also Christopher Jencks, Inequality (New York: Basic Books, 1972) which focuses more on the effect (or non-effect) of education on income:

https://www.amazon.com/Inequality-Reassessment-Effect-School...

If extreme wealth is largely due to luck then I see no reason why government should not lop the "lucky" portion off for its purposes. Of course there will always be argument as to precisely where the line is drawn between luck and skill.

Finally we must not forget bad luck, which makes fools of us all. Just as there are those who are super-wealthy due to luck, there are those whose livelihood has been destroyed by luck. I do feel an obligation to help them back onto their feet.

FabHK4• 8 years ago

Robert Frank's book Success and Luck: Good Fortune and the Myth of Meritocracy is another enjoyable book about this (and supports your argument for some form of government redistribution).

sebastos• 8 years ago

Absolute junk science. A negative contribution to net human insight.

The simulations show that although talent has a Gaussian distribution among agents, the resulting distribution of success/capital after a working life of 40 years, follows a power law which respects the ”80-20” Pareto law for the distribution of wealth found in the real world.

As opposed to what? What kind of distribution might you expect? Based on the insanely simple model that was presented, what other possible outcome could have been drawn?

In this paper, starting from very simple assumptions, we have presented an agent-based model which is able to quantify the role of talent and luck in the success of people’s careers.

No, you have not. You have presented an agent-based model which is able to quantify the role of talent and luck in a 2D roulette game with a completely contrived, non-empirical bias parameter you've named "talent". It bears literally no relationship to reality, where random massive doublings of wealth are the exception, not the rule.

It really bothers me that people write news articles about the impact of this "research".

Ancalagon• 8 years ago

This paper reminds me of an article I read yesterday about how we are no longer in the information age, but rather the "reputation" age. Goes to show, even science that might seem reputable to the average layperson can be complete garbage.

sdhgaiojfsa2• 8 years ago

My status on this is that the model could be a good model, but that hasn't been established. You cannot reason from "the outcomes look like reality" to "the parameters and mechanisms in the model are the same as the parameters and mechanisms in reality." That is backwards.

One thing you can say is, "IF reality's parameters and mechanisms are like this model's, you would expect the outcome that we in fact observe in reality." This is evidence, if not particularly strong evidence. There are infinitely many models that lead to the similar outcomes that we observe in reality, and an even larger infinitely many models that don't.

pdubbs903• 8 years ago

Their model is if you have a lucky event you have P(talent) chance of doubling your capital and if you hit an unlucky event your capital is halved. Any step in time where you neither experience luck or unluck you are left unchanged. It seems wrong on face for several reasons:

- You need to be "lucky" in order to ever increase your wealth, which makes the "finding" that luck is more important than talent completely obvious from the way the model was designed

- Capital only changes by multiplication and division, so the fact that this model "recreated" the power distribution we see in wealth in the world is obvious from the setup. It was designed to be a power distribution and couldn't be anything else

- Talent has no effect on your life during unlucky or neutral periods in their model. This obviously fails to conform to the real world.

tldr; they designed a power-distributed model where luck was clearly more important than talent, and "discovered" that it showed a power distribution where luck is more important than talent.

js84• 8 years ago

I'd love to see your model. Criticizing a model is relatively easy, coming up with something that describes the reality (in this case, Pareto distribution of wealth) yet better is much harder.

As opposed to what? What kind of distribution might you expect?

For one thing, they might have expected the result not to be dominated by luck.

It bears literally no relationship to reality, where random massive doublings of wealth are the exception, not the rule.

I don't think this will help to control the luck as opposed to talent. I suspect the problem is in the "leverage". Having more wealth makes it easier to accrue more wealth in the future, however, the same is not true for talent. Having more talent doesn't help you get much more talent.

So eventually, regardless how big your talent can be, the accrued wealth will dominate the end of the distribution. The rate at which the wealth is accrued doesn't matter, it will only reduce social mobility.

Addendum: Interestingly, the model actually shows what we would expect for low to middle end of income distribution, that talent there is more important than wealth. Which is in line with my explanation.

b4lancesh33t• 8 years ago

I don't think that's how it works. A model doesn't become a good model simply because it's hard to or nobody has bothered to make a better one.

Zak• 8 years ago

It really bothers me that people write news articles about the impact of this "research".

News articles about science, even good science are often terrible. The most common problems I see are oversimplifying, overgeneralizing and overstating conclusions. Many readers then further generalize and simplify what they read in the article.

I just saw this recently with an article about a study that concluded (and I'm oversimplifying here) that NSAIDs are a better first-line treatment for arthritis pain than opioids. By the time a layperson was referencing it in conversation, they had concluded that it's never a good idea to use opioids to treat any pain.

jnordwick2• 8 years ago

R/economics went over this a bit too. There are other issues with the model that and to make it very poor:

* - fixed rate of return (doubled or halved) make luck play an oversized role. One of talents greatest contributions is knowing how to let your winners run and cut your losses. The setup is close to a random walk by definition.

- risk reduction is hugely important. High earners especially when speaking of finance tend to know how to reduce risk. Only fools always bet half they capital in every decision.

* - talent would understand what events are more likely to succeed than just every event having the same probability.

- talent and preparation generate events. The more you prepare the more chances you'll have available. Most successful people have failed multiple times but keep trying.

- no learning. One of talents great benefits is learning from mistakes. And when combined with increased number of chances that talent provides, this is a critical feedback cycle the model misses.

- competition. Businesses aren't competing against the impersonal universe, but against other individuals. The trial events should have occurred in that context. If they really wanted to keep this silly 2D thing, it would have been better to have two agents roll against each other when meeting, taking talent into consideration.

Basically the model made everybody similar and then had an exponential random function. With such small tails in the talent pool, there is no other decision it could have reached. I'm shocked this is being upheld as valid research.

* Edit: The response by @edmccard below says that a couple of these might also be luck based (those related to evaluating events), and that is a really valid point. We know that stock pickers are mostly luck for example. It would seem plausible this also extends to evaluating what job to enter or what company to start.

Still not possible to easily type asterisks on HN without them getting interpreted as italics

edmccard• 8 years ago

...One of talents greatest contributions is knowing how to let your winners run and cut your losses...
...talent would understand what events are more likely to succeed...

If we already know that these things are the result of talent and not luck, and if it's a foregone conclusion that the model gives an "oversized role" to luck, then I guess these kinds of investigation are doomed from the start.

FabHK4• 8 years ago

The model shows that a mix of luck and merit can lead to highly unequal outcomes in which success is only tenuously linked to merit. There are other models yielding similar results, as for example outlined in Robert Frank's enjoyable book Success and Luck: Good Fortune and the Myth of Meritocracy. I don't find the mechanism entirely implausible, but that's a longer discussion.

These models are an important counterpoint to naive "Economism" [1] models (where income = marginal product, thus just and justified and necessary for efficiency), and thus relevant for an informed policy discussion.

[1] See James Kwak's book of that title.

melancholique• 8 years ago

Why authors of article assume that talent is distributed according to Gaussian function? Am i mistaken or authors didn't give any references to researches on this assumption?

FabHK4• 8 years ago

They don't assume that real world talent is normally distributed. It's just a property of the agents in their model that makes it more likely that they can take advantage of good luck, "talent" here is just an evocative name.

jrs235• 8 years ago

Read Malcolm Gladwell's book Outliers for a mind opening perspective on how much "luck" and timing plays into individual "success".

wvlia5• 8 years ago

I stopped reading the paper, thinking it was amateurish garbage, when I saw the graph containing tiny people

thisisit• 8 years ago

Was there a particular reason to post the same link within an hour?

Two discussions posted by the new account:

https://news.ycombinator.com/item?id=16591908

https://news.ycombinator.com/item?id=16591878

creep• 8 years ago

As an anecdote, my friend's dad was once camping with a friend and lightning hit. His friend died, he did not although he, too, was struck by lightning. Years later he won a $5M home lottery.

I consider him to be the luckiest person I know. He has bad luck and good luck quite often, for no reason.

FabHK4• 8 years ago

That reminds me of the Japanese fellow who was in Hiroshima when the bomb hit, survived, returned to work in his home town Nagasaki when the second bomb hit, survived, and lived until 2010. Talk about bad luck and good luck.

https://en.wikipedia.org/wiki/Tsutomu_Yamaguchi

ryeguy_24• 8 years ago

I wonder if this type of analysis if even worth our time as individual people and as society. Will the information it uncovers lead to a better life for us? We all know success is some combination of luck, skill, and hard work. Luck is probably partially dependent upon the other two components (skill and hard work). But by how much, who cares?

If success and well-being is fully determined by luck, then what should I do today?. If it's not, then I'll continue reaching for the stars. I don't think you will ever prove 100% dependence so anything less means you have to try.

The Role of Luck in Life Is Still Misunderstood

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