8/4/18: Talent vs Luck: Differentiating Success from Failure

In their paper, "Talent vs Luck: the role of randomness in success and failure", A. Pluchino. A. E. Biondo, A. Rapisarda (25 Feb 2018: https://arxiv.org/pdf/1802.07068.pdf) tackle the mythology of the "dominant meritocratic paradigm of highly competitive Western cultures... rooted on the belief that success is due mainly, if not exclusively, to personal qualities such as talent, intelligence, skills, efforts or risk taking".

The authors note that, although "sometimes, we are willing to admit that a certain degree of luck could also play a role in achieving significant material success, ...it is rather common to underestimate the importance of external forces in individual successful stories".

Some priors first: "intelligence or talent exhibit a Gaussian distribution among the population, whereas the distribution of wealth - considered a proxy of success - follows typically a power law (Pareto law). Such a discrepancy between a Normal distribution of inputs, suggests that some hidden ingredient is at work behind the scenes."

The authors show evidence that suggests that "such an [missing] ingredient is just randomness". Or, put differently, a chance.

The authors "show that, if it is true that some degree of talent is necessary to be successful in life, almost never the most talented people reach the highest peaks of success, being overtaken by mediocre but sensibly luckier individuals."

Two pictures are worth a 1000 words, each:

Figure 5 taken from the paper shows:

• In panel (a): Total number of lucky events and
• In panel (b): Total number of unlucky events 

Both are shown as "function of the capital/success of the agents"

Overall, "the plot shows the existence of a strong correlation between success and luck: the most successful individuals are also the luckiest ones, while the less successful are also the unluckiest ones."

Figure 7 shows:
In panel (a): Distribution of the final capital/success for a population with different random initial conditions, that follows a power law.
In panel (b): The final capital of the most successful individuals is "reported as function of their talent".

Overall, "people with a medium-high talent result to be, on average, more successful than people with low or medium-low talent, but very often the most successful individual is a moderately gifted agent and only rarely the most talented one.


Main conclusions on the paper are:

• "The model shows the importance, very frequently underestimated, of lucky events in determining the final level of individual success." 
• "Since rewards and resources are usually given to those that have already reached a high level of success, mistakenly considered as a measure of competence/talent, this result is even a more harmful disincentive, causing a lack of opportunities for the most talented ones."

The results are "a warning against the risks of what we call the ”naive meritocracy” which, underestimating the role of randomness among the determinants of success, often fail to give honors and rewards to the most competent people."

6/7/2013: WLASze Part 3: Weekend Links on Arts, Sciences and Zero Economics

This the third part of my WLASze: Weekend Links on Arts, Sciences and Zero Economics posts. Links to Part 1 and Part 2.

As I said in the opining for Part 1, this is the week of July 4th, so let's revisit some of the Americana here, again. Some of my favourite imagery from the US of A, tied together by similar theme:

Arizona's Wave Rocks: Coyote Buttes ravine

Death Valley's Mosaic Canyon:

I remember hiking both of the above. Stunning beauty!


More on the theme of American water and art: Christo & Jeanne-Claude's 'Surrounded Islands' (1980-83) in Biscayne Bay, Greater Miami, Florida

h/t for the reminder of this installation to @saatchi_gallery via twitter.


From the arid and tropical USofA to arctic extremes of Kola Peninsula of Russia: "It has been said that the human race knows more about certain distant galaxies than it does about the ground that lies beneath its very feet. In fact, while it took the famous Voyager 1 satellite twenty-six years to exit our Solar System (relaying measurements to Earth from 16.5 billion km away), it took about the same amount of time for humanity to penetrate a mere 12 km into the Earth's surface."

Let's not get embarrassed by this, but we probably now even less about our neighbours next door…
Note: reference to the Voyager 1 mission referenced in Part 1 of WLASze links.


TED Talks tend to be occasionally 'political' and on some other occasions they tend to be rehasments of things we've heard about before and not necessarily pushing the boundaries of what we know into what we would like to know. Here's an exceptional example of good TED (h/t to @rszbt via twitter).

A quote: "…the general understanding is that the crisis came as a complete surprise. To the initiated, his choice of the word “cascaded” to describe the dynamics at work indicates that he has a different view. His hypotheses are
(1) Financial bubbles can be diagnosed in real-time before they end, and
(2) The termination of financial bubbles can be bracketed using probabilistic forecasts.
His underlying concept is the theory of “Dragon Kings”:
Dragon Kings represent extreme events which are “in a class of their own”. They are special. They are outliers which are generated by a specific mechanism which, as Sornette emphasizes, makes them “predictable and perhaps controllable”."

Yes, some bubbles are predictable at least in terms of being able to generate early alerts. Yes, the latest one, especially relating to property prices, was predictable, even using simple AR-based models of property prices. Yes, the propagation of the latest crisis across the balance sheets of financial institutions was also predictable. But… no - timing and extent of the crisis was probably not predictable. And yes, 'bracketed' or interval-targeted predictability is probably here, but we still have no 'turning point' power, in my view.

I like the contrast of Dragon Kings to Black Swans: "A black swan is a rare bird. Seeing it shatters all beliefs that swans should be white. The black swan stands for the idea of unpredictability and extreme events being “fundamentally unknowable”. As Sornette emphacizes, the Dragon King is “exactly the opposite” of a Black Swan, as in his concept, most extreme events are actually knowable and predictable." But the point also is that the Dragon King does not shatter our systems of belief and inquiry - it actually ex-post reinforces them. In other words, if the current crisis is a Dragon King, then the answer to the problems it posses is not in seeking new 'tools' for inquiry, but in reinforcing existent 'tools'. This point is more than coincident with my view that the systems of thinking did not fail us in this crisis, but the systems of enforcement of that thinking did - a point informed by the work I am yet to transcribe into paper format existence on AR models application in forecasting property prices dynamics (work in progress).


Staying on predictability: Nature reported on the latest breakthroughs in quantum mechanics involving the Heisenberg Uncertainty Principle (HUP). In quantum mechanics, HUP sets fundamental limit to the degree of precision which can be assigned to various complementary pairs of physical properties of particles. Classic postulation of HUP states that the more precisely we know the position of some particle, the less precisely we know its momentum, and vice versa. More on HUP here and here.


And for a happy ending to this week's links:

Christopher Wool's Minor Mishap, 2001

Wool was a major 'new blue-chip' name at Basel 2013.

And the opposite of Wool 'complex statism' - the 'arrested dynamism' of Big-Bang-Bullets in Plexiglass:

http://wordlesstech.com/2013/06/30/the-big-bang-bullets-in-plexiglass/


Enjoy!