Get luckier

How lucky do you consider yourself? Very? Not so much? For most of us the answer varies from one day to another, so perhaps it does not have much of a meaning.

But from a scientific perspective, finding out about possible sources of good and bad luck would be enlightening.

It turns out, this is exactly what Prof. Richard Wiseman did in a project called The Luck Factor.

He recruited hundreds of participants, making sure that they fell under one of two categories; those who consider themselves very lucky, and those who think they are mostly unlucky. He interviewed them, got to know them in detail and subsequently formulated a hypothesis.

Then he devised an experiment to test it.

He gave everybody the same newspaper and asked each person to count the number of pictures in it. As he suspected, the unlucky group took a lot of time to do the task, while most members of the lucky group spent only a few seconds on it; they had “luckily” noticed a huge, half-page section that revealed, in writing, the actual number of pictures in the paper.

This finding links luck to attention. If you focus hard, you miss out on opportunities. Curiously, when you lose focus by doing things rather randomly, e.g. casually determine your route to work, randomize the people you meet in parties, etc… you increase the chances of receiving a positive shock that might change things for the better, without much effort.

That is not all though. So take it easy and read more about The Luck Factor, here.

Birth luck

How did you become the person you are? What decisions defined your current employment, your current social life, your current house, car, possessions, tastes?

Possibly, many past decisions led you to make other decisions, seize the opportunities and acquire the knowledge and wisdom that brought you where you are right now. In business and leisure, it seems we are the sum of our decisions.

Are we?

Think also about the beginning. How much would you say our birth conditions played a role in our present situation? How much did the initial conditions influence the current state of things?

One rarely asks this question.

Would I be able to enjoy the same decisions, opportunities and accomplishments were I born in Lesotho to a single mother, or in Afghanistan to a family with seven children? What if I were raised by a wealthy family, but in 1542.

How much of one’s success in business or life should be attributed to one’s decisions? I am not sure.

Given the difficulty of the question, I propose another way of looking at this issue. Consider a donation decision.  Some charity, campaign or person is asking for your contribution. Why don’t you try to base part of your decision on the initial conditions of the recipient? Was the recipient of the your contribution underprivileged from the beginning? Would she be able to have a similar life as yours, if her birth conditions were like yours?

I think one would be fairer if he acknowledges the power of birth luck.

Lottery

Say there is a lottery where the outcome is determined randomly. You are given a choice between three  tickets.

A.   24 – 28 – 33 – 41 – 45 – 47

B.   37 – 38 – 39 – 40 – 41 – 42

C.   12 – 23 – 29 – 32 – 38 – 43

Which one would you select? A, B or C? And why did you make that selection? Would you say that you chose at random?

I asked this question a few years ago to dozens of Masters and PhD students in economics, finance and management. They all knew that the numbers were randomly drawn. Yet, the option B was rarely chosen. Also, when I asked for the reasons behind their selection, only a third of them claimed to have made a random selection. Two thirds had developed a certain reason for why one of the tickets had less chances of winning than the others.

The statistically sophisticated participants of this mini experiment noticed a meaningless pattern and acted on it. Despite their wisdom, their intuition concluded that the sequence in option B was somehow less likely to happen.

In fact we tend to see patterns in many random events, which leads us to believe that some things are more predictable than they actually are. This illusion is sometimes fueled by how the information is presented to us.

Consider a different representation of the above problem.

A.     242 – 833 – 414 – 547

B.     373 – 839 – 404 – 142

C.     122 – 329 – 323 – 843

Which one would you select now? Why?

Primitive

How does the stock market work? Is it predictable? Which new firms will succeed next year? Which ones will fail? Which products will be popular? Why exactly? Will you lead a healthy life? How much control do you have over it?

More importantly… How much of all these will depend on chance? What is the weight of randomness in all of this?

Somehow, the understanding of randomness does not come naturally to us. And by us, I mean humans.

Is an outcome considered random because we do not know how it was generated? Or was it really randomly conceived? A bit of both maybe?

How does one characterize or even recognize chance events?

The problem is that, possibly, we are not yet equipped with the innate statistical sophistication that is needed to understand such issues intuitively. Humans have been living on earth for a very… very long time. The probability theory that deals with the understanding of randomness is only a few centuries old.

The first discussions about such concepts are found in the letters that went back and forth between Blaise Pascal and Pierre de Fermat. Both brilliant men, their primary concern was to decipher and possibly better perform in gambles. The letters date back to 1650s.

Hence, given the relative recency of our adventure with randomness, it might be that we will need several centuries more to evolve and fully grasp its nature and consequences.

We are still primitive in the face of randomness.