The Harder I Work, the Luckier I Get
When faced with uncertainty, how do we know whether the forecasts we make are any good? To be more specific, how can we tell whether the successes we experience have been achieved through hard work, knowledge and talent or simply as a consequence of blind chance? Samuel Goldwyn, the film producer, once remarked: “the harder I work, the luckier I get.” Traditionally, this is seen as an ironic paraphrasing of a seemingly self evident truth: better outcomes go to smarter people who try harder. Goldwyn’s insight, however, was obviously in recognising that whilst hard work and talent play their part in shaping futures, luck still has a big influence to play. In statistical terms, luck is always there but skill changes the shape of the probability distribution and the position of the average. In competitions, however, we may find something paradoxical: the harder we work, the more our outcomes are dependent on luck. This time, no irony is implied. Genuinely greater skill leads to a bigger influence of luck. How can that be, you might ask.
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