How does luck work?

How does luck work?

Do you know who Archie Karas is? This is a man who worked as an ordinary waiter, went to Las Vegas with $50 in his pocket, then began winning at the casino and in 3 years he had accumulated $40 million in winnings! And it became the longest winning streak in the history of gambling.

Most of us would call this an example of tremendous luck, agreeing with Archie, who said to himself: “God, I’m so lucky!”. However, a rational statistician would have laughed at our superstition and then presented a series of random coincidences that helped Karas. Over a long enough period of observation, the randomness that reigns in a casino can throw anything. To call the beneficiaries of chance lucky is simply to label them ex post facto, that is, to substitute cause for effect.

To understand the nature of luck, we need to answer a basic question: “What explains what happens to us?”. Are we winners, losers, or something in between in relationships, work, sports, gambling, and life in general?

Fresh research proves that the concept of luck is not a myth. On the contrary, luck can be “fueled” by past positive events or failures, a person’s personality traits and his or her own ideas about luck.

There are superstitions about white and dark streaks in life. Well, our lucky streaks are real, but they are not the product of blind luck alone.

Our perception of fortune influences our behavior in risky situations. We do create our own success, although not everyone likes to consider themselves lucky, because “luck” is a sign that diminishes the value of other valuable qualities of an individual (e.g. talent, resourcefulness, persistence, etc.).

Luck can be evaluated not only in terms of money. Luck can save our lives. So, for example, many people who walked out of the World Trade Center during the morning rush hour or were late for work during the terrorist attacks of September 11, 2001, were lucky.

But how to explain all this?

Hindus would have thought these people simply had good karma. Christians would say that God saved these people for a higher mission of service to Him. Mystics would argue that these people were born under a lucky star. And the Chinese generally view good luck as a permanent feature of a person’s character, along with intelligence and a cheerful disposition. Every religion and culture evaluates luck differently.

In general, we would like to tell you more about Chinese traditions and attitude to good luck, because Chinese people are obsessed about all kinds of amulets, talismans and signs. In every house, on every piece of furniture, where a Chinese person lives, you will find many objects that symbolize good luck. The same goes for the arrangement of furniture, interior design – everything should be definitely according to Feng Shui!

Chinese American Maya Yang, who works as a professor of management at UCLA, confirms this and adds that the Chinese are seriously concerned not only about luck in their business and home, but also about their appearance. She recalls:

“My mother always told me: ‘You have a lucky nose’, because its shape in Chinese folklore was considered to bring good luck”.

Yang grew up in a Chinese family that lived in the Midwest USA, which gave her the opportunity to compare cultural perceptions of the two peoples. The professor came to the conclusion that fleeting good fortune now and turning away tomorrow are not the same as the unchanging, permanent good fortune (the presence of which her mother saw in the shape of her nose). For the Chinese, luck and hard work can go hand in hand in explaining a person’s success, and the property of luck is taken for granted, as something the person may have earned by his or her behavior in a past life.

And this concept is fundamentally at odds with the understanding of luck in the United States, Europe and other Western countries, where hard work and luck are considered to be completely incompatible concepts. Americans, for example, may sincerely wish their loved ones luck, but most of them do not want to believe that they are lucky. Why? Because they want to earn something. When a friend gets into a prestigious law school or medical school, an American will say: “Congratulations! You worked hard for this. You deserve it”. If a friend is not accepted, they hear: “Don’t feel bad, you’re just unlucky”.

Another interesting observation is that the more random an event seems, the more luck is valued. Scientists often study luck using examples from sports, where chance plays a significant role even in competitions in which the ability of a particular athlete is decisive.

But perhaps the most studied phenomenon is the lucky streak. This phenomenon in the casino is also called “hot hands”, when players took all the chips from the table. A famous paper by Stanford psychologists Thomas Gilovich, Robert Vallon and Amos Tversky, published in 1985, claimed that “hot hands” did not exist because it was an illusion derived from the human nature of looking for signs in the world around us.

Since then, there have been no more studies on the subject of “hot hands”. Until last year, three Harvard students became interested in the work of these scientists. Andrew Boskoksky, John Ezikowitz, and Caroline Stein concluded the following:

“It’s all about attitudes toward risk. Once a person gets into a rush, he feels empowered to take a more risky action. In basketball, for example, it might be a difficult feint or a shot from a disadvantageous position. If the attempt succeeds, it inspires the athlete to do more, which leads to the next attempt”.

You may think these conclusions are a bit far-fetched, but they are actually the result of years of research. Harvard students analyzed video footage of a total of 83,000 shots by NBA players from the 2012-13 season, which gave them enough information to estimate the difficulty of their shots. After evaluating the difficulty of each individual shot, they picked up a small but significant “hot hand” effect in those who started well and continued their streak of good luck. Such athletes have come to be known as “overheated” players.

The “overheated” player can score and win with a 30% higher than average probability. So the luck streaks exist!

Around the same time, Jeffrey Zwiebel of Stanford and Bret Green of the University of California, Berkeley, in a similar study, found that in sports there are not only fortune hunters, but also fortune destroyers. This is when coaches purposely increase their defense against “overheated” players to counteract the “hot hand” effect.

To even out the effect on “pure luck”, Zwiebel and Green decided to look at baseball, where the opposing team doesn’t distract the pitcher as much. Analyzing data from 12 years of Major League Baseball games, they discovered a pattern in a player’s last 25 pitches: those pitches foreshadowed what the next pitch would be.

The results of another study are interesting. Jumin Xu and Nigel Harvey from the University of London analyzed about half a million online bets on the results of soccer matches. According to their results:

  1. The average Briton who wins 3 times in a row (let’s call him James) is 67% likely to guess in the fourth bet as well. If James wins a fourth time, his chances of a fifth win rise to 72%;
  2. James’ friend Steve, who lost on the first bet, has a chance of getting his money back on the second bet, but that chance is only 47%. If he loses the money he borrowed from James even now, his luck decreases to 45% by the third bet.

So what is the point? Is this also the law performs when the rich always get richer and the poor always get poorer? But why? Harvey and Xu dug deeper to find out why these streaks existed at all. The clue to luck turned out to be in the personal will of the one making the bet. Let’s describe it this way:

As soon as James saw that he had won, he began to bet more cautiously, believing that he would not always be lucky and his hand would not always be hot. In contrast, Steve, who lost the first bet, thinks that since Lady Luck has turned her back on him now, she must surely smile on him next time. 

Steve and people like him fall into the usual delusion of gamblers and make more and more risky bets with each loss. As a result, winners keep winning (even if the winnings themselves are small) and losers keep losing. That is, the same rule applies to betting as it does to baseball: here, repeated luck depends on the behavior of the individual.

If the secret of people’s good fortune lies in their behavior, does that mean that people who consider themselves lucky behave in some special way?

Yes, it is! In 2009, Maya Young set out to find out if her students believed they were lucky as a characteristic of their personality. After a series of experiments, she found a correlation between belief in one’s own luck and the magnitude of a student’s achievements, as well as their level of motivation. The results of the study confirmed this hypothesis: self-confessed lucky students were more likely to persevere in tricky assignments and start with the most difficult ones, while others were more likely to give up. Thus it was concluded:

Those who believe in their good fortune will win more often due to high motivation and persistence in solving difficult problems. Therefore, their tasks will seem less difficult to them than to the proclaimed losers.

Richard Wiseman, a psychologist at the University of Hertfordshire and author of book “The Luck Factor”, also agrees with Young’s findings. Here’s what he says:

“The best way to attract luck is to see it as a normal human trait. But not one that you are born with. It’s the trait that you aspire to and develop in yourself”.

Wiseman came to these conclusions through a study of the behavior of 400 people. He purposely chose them so that one half considered themselves very lucky, and the other half were people who were sure of their unluckiness. The psychologist found out that “lucky” people are more observant and more often notice the opportunities, they listen to intuition, are optimistic and positive, which forms their good feeling, have a cheerful disposition and take trials calmly. “Unlucky” people, on the contrary, are tense, restless, and pessimistic even for the most neutral reasons.

Thus, positive thinking is one of the key features that distinguish successful people according to Wiseman. He also added:

“The more you think about the reasons for your successes and failures, the less random the nature of your luck will seem”.

However, other researchers have been ambivalent about this conclusion. They pointed out to Wiseman that in the London betting experiment, in contrast, players on the lucky streak continued to win through pessimism. They took no chances where the outcome did not depend on their efforts. Lucky Wiseman people can win in life, but careless optimism can let them down in Vegas.

And, by the way, that is exactly what happened to our first hero of the article, Archie Karas. Just three weeks after his huge winnings, he lost the entire $40 million. His “lucky streak” ended with a net loss of $50. And his bad streak didn’t end there. In 2013, Karas was jailed for robbery and attempted cheating at a game of Blackjack. A year later, though, fortune smiled slightly on him: the ex-waiter was on parole, and if he continued his good behavior, he would avoid a three-year prison sentence.

What conclusions can we draw from all this? If you rely blindly on chance, he’ll play you just as blindly.

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