How We Constantly Underestimate the Role of Luck in Our Lives

Another demonstration of the decisive role of luck in our lives is given in this excellent article from the MIT: ‘If you’re so smart, why aren’t you rich? Turns out it’s just chance‘. The initial research question is quite interesting: since capabilities like intelligence are spread according to a normal distribution, and so is work time capability, how come wealth is spread like a power curve?

A computer model has been setup that accurately predicts this effect. “The results are something of an eye-opener. Their simulations accurately reproduce the wealth distribution in the real world. But the wealthiest individuals are not the most talented (although they must have a certain level of talent). They are the luckiest. And this has significant implications for the way societies can optimize the returns they get for investments in everything from business to science.”

The model is then extended to determine what are the best strategies for spreading support for e.g. research funds for researchers. The model shows some counter-intuitive results: since past success is not predictive for future success and mostly caused by luck, spreading funds equally between all is the most effective strategy. But that’s clearly not what happens in life where successful people tend to get more.

Work out to be more lucky!