Do Humans Succeed Because Of Brains or Luck?

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You’ve probably heard the saying “fortune favors the brave,” but does luck favor the brainy? When it comes to our world’s innovators, it’s hard to know what came first: the genius or the success. When it comes to our own accomplishments, many of us are inclined to resist explanations that involve luck. So why don’t we do the same for others?

“Luck is not something you can mention to in the presence of self-made men,” E.B. White once wrote. And there’s truth to that statement. In fact, seeing ourselves as self-made can actually make us less generous and public-spirited, the Atlantic notes. As it turns out, chance plays a far larger role in life outcomes than most people realize—or are willing to accept.

And the luckiest of all of us are the least likely to appreciate their good fortune.

According to Pew Research Center, people in higher income brackets are more likely than those with lower incomes to say that individuals get rich primarily because they work hard. Wealthy people overwhelmingly attribute their own success to hard work rather than luck or being in the right place at the right time. Interestingly, the answer changes slightly if you ask people to reflect on their good fortune.

Psychologists use the term hindsight bias to describe our tendency to think after the fact that an event was predictable when it wasn’t. The availability heuristic is an important clue as to why many of us see our success as inevitable: we tend to estimate the likelihood of an event based on how readily we can recall similar instances. As an example, when talented, hard working people in developed countries become rich, they ascribe their success to hard work because they are significantly aware of how hard they’ve worked. But their day-to-day experience does not allow them to credit the fact they were born in American, rather than a third world country, for their success.

Then there is the simple fact that events that work to our disadvantage are easier to recall than those that affect us positively.

“When you’re running or bicycling into the wind, you’re very aware of it,” Tom Gilovich wrote. “You just can’t wait till the course turns around and you’ve got the wind at your back. When that happens, you feel great. But then you forget about it very quickly—you’re just not aware of the wind at your back. And that’s just a fundamental feature of how our minds, and how the world works. We’re just going to be more aware of those barriers than of the things that boost us along.”

Of course, none of this suggests that we should undermine our own responsibility in our successes. But it is important to note that being prompted to recognize luck can help to encourage generosity.

Take this example from The Atlantic:

For example, Yuezhou Huo, a former research assistant of mine, designed an experiment in which she promised subjects a cash prize in exchange for completing a survey about a positive thing that had recently happened to them. She asked one group of participants to list factors beyond their control that contributed to the event, a second group to list personal qualities and actions that contributed to it, and a control group to simply explain why the good thing had happened. After completing the survey, subjects were given an opportunity to donate some or all of their reward to charity. Those who had been prompted to credit external causes—many mentioned luck, as well as factors such as supportive spouses, thoughtful teachers, and financial aid—donated 25 percent more than those who’d been asked to credit personal qualities or choices. Donations from the control group fell roughly midway between those from the other two groups.

To dive a little deeper, let’s take a look at the dictionary’s definition of skill as “the ability to use one’s knowledge effectively and readily in execution or performance.” That definition implies a certain talent you were born with and can utilize—the type of skill-sets that ultimately differentiate the athletes from the mathletes.

Here’s how luck and skill play together, according to Michael Mauboussin, a Chief Investment Strategist at Legg Mason Capital Management:

I think this is a cool analysis. I learned from Tom Tango, a respected sabermetrician, and in statistics, it’s called “true score theory.” It can be expressed with a simple equation:

Observed outcome = skill + luck

Here’s the intuition behind it. Say you take a test in math. You’ll get a grade that reflects your true skill — how much of the material you actually know — plus some error that reflects the questions the teacher put on the test. Some days you do better than your skill because the teacher happens to test you only on the material you studied. And some days you do worse than your skill because the teacher happened to include problems you didn’t study. So you grade will reflect your true skill plus some luck.

Of course, we know one of the terms of our equation — the observed outcome — and we can estimate luck. Estimating luck for a sports team is pretty simple. You assume that each game the team plays is settled by a coin toss. The distribution of win-loss records of the teams in the league follows a binomial distribution. So with these two terms pinned down, we can estimate skill and the relative contribution of skill.

To be more technical, we look at the variance of these terms, but the intuition is that you subtract luck from what happened and are left with skill. This, in turn, lets you assess the relative contribution of the two.

Interestingly, Maubossin also attributes some of our cognitive dissonances when it comes to our own successes to the structure of our brain:

I’d like to add one more point that is not analytical but rather psychological. There is a part of the left hemisphere of your brain that is dedicated to sorting out causality. It takes in information and creates a cohesive narrative. It is so good at this function that neuroscientists call it the “interpreter.”

Now no one has a problem with the suggestion that future outcomes combine skill and luck. But once something has occurred, our minds quickly and naturally create a narrative to explain the outcome. Since the interpreter is about finding causality, it doesn’t do a good job of recognizing luck. Once something has occurred, our minds start to believe it was inevitable. This leads to what psychologists call “creeping determinism” – the sense that we knew all along what was going to happen. So while the single most important concept is knowing where you are on the luck-skill continuum, a related point is that your mind will not do a good job of recognizing luck for what it is.

Source: The Atlantic, Wired

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