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The Role of Luck in Life Is Still Misunderstood
151–160 of 196 posts
Re: The Role of Luck in Life Is Still Misunderstood
#152Absolute 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…
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 r…
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.
Re: The Role of Luck in Life Is Still Misunderstood
#153Earlier quoted context omitted.
Excessive belief in luck seems more convenient to me. At least by trying to work hard you're taking responsibility for yourself.
"Excessive" - maybe. On the other hand 'taking responsibility for yourself' leads very fast to the just-world fallacy when applied to others: People don't deserve help, if they worked harder they would have reached their goals.
Maybe. I'd much rather fall closer to the "just-world fallacy" that you mention, than to the "your success is based mostly on 'luck' so we must resort to a 'higher power' to make things 'fair'" side of things.
Re: The Role of Luck in Life Is Still Misunderstood
#154> 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.
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.
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.
Re: The Role of Luck in Life Is Still Misunderstood
#155Absolute 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…
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
Re: The Role of Luck in Life Is Still Misunderstood
#156Where Warren Buffet would have landed if he was born in Afghanistan? I have thought about this question a lot recently without any satisfaction.
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
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.
Re: The Role of Luck in Life Is Still Misunderstood
#157Earlier quoted context omitted.
>> 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 agen…
> - 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…
In their model the only benefit of talent is it makes you more likely to double your wealth given luck. This means that they assume luck is needed for advancement while talent is not. Hence they assume that luck is more important than talent, and it's unsurprising that they see the result.
Likewise the power distribution is built in. Power distributions are created by multiplicative laws and the only ways wealth changes in this model are multiplication and division. This means they also assume the power distribution they claim to discover.
It's definitely very hard to build models that match reality, but this one doesn't really seem to try and it's outcomes are so predictable they don't offer meaningful insight. Luck surely plays a huge role in success, but something like longitudinal studies where we measure the abilities of children and then follow their outcomes are likely far more insightful.
Re: The Role of Luck in Life Is Still Misunderstood
#158Why 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?
Re: The Role of Luck in Life Is Still Misunderstood
#159Earlier quoted context omitted.
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 r…
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 ob…
How would you change the model to be more realistic and how you think would your changes affect the outcome?
Re: The Role of Luck in Life Is Still Misunderstood
#160Earlier quoted context omitted.
> I'm not sure what to tell you, people who have built organizations that employee thousands of people have contributed more to society than average. If that needs further justification then I'm not even sure how to respond to that. A very large portion of those people have contributed more suffering to the world, and continue to do so through the continued exploitation of the worker class and lower classes.
Should probably bow out after this one; I don't think there is much room for rational discussion for my viewpoints here. I agree that walmart is a piece of crap, but you don't really know what suffering is. Please ask your grandparents what options their grandparents had in life. If you have some notion that corporations that try to profit are a blight on society and that their abolition will lead to some dream world…
> I don't think there is much room for rational discussion for my viewpoints here.
I agree, you refuse to address the arguments people bring up in favor of attacking straw men and relying on sarcastic hyperbole.