Saturday, June 16, 2007

On Luck

20/20 the other day actually had an interesting episode devoted to the concept of luck. It could have been a fluff piece, but actually echoed many of my views on the matter (I credit the rationalism of JohnStossel for that). I have pondered luck before, in the context of the wild nights of beer and bridge that would last all night back in college. Bridge is an eminently statistical game, and we paid acute attention to the value of your cards. In any random deal of the cards, the average point value of a hand has to be 10. Statistics and the Law of Large Numbers say thateveryone's average should be pretty dead on 10 after just one night, yet over literally thousands of hands, we each had luck reputations. T- was just generally lucky with an average well above 10. J- and I were pretty average. A- averaged a bit below 10, but would really good hands relatively often. C- averaged way below 10, but would have disproportionately lots of spectacularly good hands. Of course all this is nonsense. And rationally, we all knew that, but weal believed it. My conclusion, after much pondering, was that luck was purely a matter of perception.

Over the years, I have also pondered the Tao (something I learned about for a paper in high school english) and the general philosophy that if you trust the Tao, things "magically" work out. You create your own luck. The power of positive thinking; thefishoil popular these days peddles by the like of What the Bleep do we know. And yet, I believe it. Without resorting to magic.

The 20/20 episode related interesting research. A researcher tracked people who considered themselves lucky or unlucky, and planted a $20 bill on the street in their path. The lucky people were more likely to notice the money. Their luck was created.

Something worth studying maybe, the relationship between skill and luck. Actually, something that I did with my office mate back at Stanford, using game theory in the context of education. Unfortunately, my arch-nemesis, Steve Levitt apparently is already working on it, playing poker in Vegas.
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