I give you a machine, once per year say, and put it at the entrance to your home. It's broken. If you fix it, it will, with 5% probability, give you a ton of money. In the other 95% of cases you get nothing, it disappears, wait for next year.
Is chance a major component? Of course. But not tinkering with that machine is lower EV than tinkering with it.
If you stay in bed all day, ignore the machine and do something else instead, you're not going to get anything, ever. It will never spontaneously open by chance.
You post below that "you can do everything wrong and still succeed". No, you actually can't. If you're picturing a startup founder that makes a lot of seemingly silly decisions - well, they still made the (high risk) decision to start that company.
If you lay in bed all day, or work your corner shop job forever, then you are not increasing your EV.
I work in a field that is very heavily based on probability; I literally bet for a living. Luck is a considerable component, but if you want to tell me skill is irrelevant, then I'd like to show you what happens if I just tweak this parameter here...
The point is that the variance in actual value based on chance is larger than the variance in the actual value based on skill/talent/intelligence/effort.
This is not saying that there is no effect of skill/talent/intelligence/effort, but that the effect size is smaller than commonly thought and smaller than the variance due to luck.
That's only the case if you make nonsensical comparisons.
I wasn't born to an upper middle class family and I didn't get a ten million dollar trust fund. I don't have the correct muscle fibers to be an Olympian, etc. That's happened, it's done. That comparison is completely pointless and irrelevant for me.
From the perspective of decision making, what matters is the difference in expected value of different decisions that I make now, from T=0, not some time in the past that I can't affect.
(FWIW, 'skill/talent/intelligence/effort' are also part of that initial distribution).
The idea that success is primarily random makes no sense at all, because there are certainly paths that an individual can take that will not under any circumstances result in outsized success.
There are paths that an individual can take that will by definition result in failure, like if I went out and drove my car into a wall at 100mph.
> From the perspective of decision making, what matters is the difference in expected value of different decisions that I make now, from T=0, not some time in the past that I can't affect.
That still depends on the type of decision and context.
If you are talking about "should I play video game or should I study" that is a type of decision where valuing individual effort is absolutely beneficial.
If you are talking about making a decision based on evaluating other people/companies based on their life outcomes, then awareness of the role of luck is absolutely beneficial. You need to look beyond the results and also evaluate the decision making and luck that went into obtaining those results.
It's not an either or sort of thing. When we over-estimate the role of decision making in producing outcomes, we end up with a worse model of the world that will lead to worse decision making.
> It's not an either or sort of thing. When we over-estimate the role of decision making in producing outcomes, we end up with a worse model of the world that will lead to worse decision making.
I give you a machine, once per year say, and put it at the entrance to your home. It's broken. If you fix it, it will, with 5% probability, give you a ton of money. In the other 95% of cases you get nothing, it disappears, wait for next year.
Is chance a major component? Of course. But not tinkering with that machine is lower EV than tinkering with it.
If you stay in bed all day, ignore the machine and do something else instead, you're not going to get anything, ever. It will never spontaneously open by chance.
You post below that "you can do everything wrong and still succeed". No, you actually can't. If you're picturing a startup founder that makes a lot of seemingly silly decisions - well, they still made the (high risk) decision to start that company.
If you lay in bed all day, or work your corner shop job forever, then you are not increasing your EV.
I work in a field that is very heavily based on probability; I literally bet for a living. Luck is a considerable component, but if you want to tell me skill is irrelevant, then I'd like to show you what happens if I just tweak this parameter here...