The Role Of Skill Versus Luck In Poker: Evidence From The World Series Of Poker - NBER (05/2011)
Michael J. MauboussinPure Skill Pure Luck Michael J. Mauboussin, The Success Equation: Untangling...
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Michael J. Mauboussin
Transcript of Michael J. MauboussinPure Skill Pure Luck Michael J. Mauboussin, The Success Equation: Untangling...
Michael J. Mauboussin
Source: http://www.flickr.com/photos/alvy/.
Pure
Skill
Pure
Luck
Michael J. Mauboussin, The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing (Boston, MA: Harvard Business Press, 2012). Michael J. Mauboussin, The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing (Boston, MA: Harvard Business Press, 2012). Michael J. Mauboussin, The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing (Boston, MA: Harvard Business Press, 2012).
Source: Michael J. Mauboussin, The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing (Boston, MA: Harvard Business Press, 2012).
Pure
Skill
Pure
Luck
Pure luck and no skill No luck and pure skill
Blend of luck and skill
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Dif
fere
nce
in H
eig
ht (
inch
es)
Height (inches)
Average height
Father
Father
Son
Son
Three Easy Lessons
Reversion to the mean
Contribution of skill versus luck . . .
Outliers = extreme skill and luck
Source: Library of Congress reproduction number LC-DIG-hec-22989; Michael J. Mauboussin, The Success
Equation: Untangling Skill and Luck in Business, Sports, and Investing (Boston, MA: Harvard Business Press, 2012).
Density
Peak p
erf
orm
ance
Past
Peak p
erf
orm
ance
Present Source: Googie Man.
http://en.wikipedia.org/wiki/File:Ted_Willia
ms_BBall_Digest_May_1949_raw.jpg.
Olympic Men’s Marathon
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120
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1st and 2
0th
Pla
ce D
iffe
rential (M
ins)
Com
ple
tion T
ime (
Min
s)
Difference between
1st and 20th place
1st Place Time
Source: www.olympicgamesmarathon.com; Michael J. Mauboussin, The Success
Equation: Untangling Skill and Luck in Business, Sports, and Investing (Boston, MA:
Harvard Business Press, 2012); iStockphoto.
Age
Perf
orm
an
ce
Source: James Phelps.
Source: www.tennis28.com.
Tennis Grand Slam Winners, 1968-2014
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Fre
quency
Age
0
5
10
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68
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Age
Crystallized
intelligence
Fluid
intelligence
Performance
Age
Level
Source: Based on Sumit Agarwal, John C. Driscoll, Xavier Gabaix, and David I. Laibson, “The Age of Reason: Financial
Decisions Over the Life Cycle and Implications for Regulation,” Brookings Papers on Economic Activity, Fall 2009, 51-117.
Jack
Married
Anne
George
Unmarried
A. Yes
B. No
C. Cannot be determined
Source: iStockphoto.
Source: Library of Congress, Prints & Photographs Division [LC-USZ62-98072].
.342 .658
Source: Hu Totya.
Source: Musée du Louvre.
La Sainte Famille
de François I
Raphael
600,000 francs
La Belle Jardinière
Raphael
400,000 francs
La Vierge aux Rochers
Leonardo da Vinci
150,000 francs
La Joconde
Leonardo da Vinci
90,000 francs
Estimate of Market Value in 1849
Source: Musée du Louvre.
Source: Library of Congress, Music Division [LC-GLB23- 0151].
0%
50%
100%
Trials
25 50 75
Independent Social World A Social World B
Lockdown
Lockdown
Lockdown
#1
#48
Source: Used by permission.
Skill
Outcome
Source: Pinguino’s flickr account.
King
Bachman
The Interpreter
Source: http://emotion.caltech.edu/agcc/images/structuralConnectivity.jpg. Source: http://www.charlierose.com/view/interview/451.
The storytelling mind is allergic to uncertainty, randomness, and
coincidence. It is addicted to meaning. If the storytelling mind
cannot find meaningful patterns in the world, it will try to impose
them. In short, the storytelling mind is a factory that churns out
true stories when it can, but will manufacture lies when it can’t.
-Jonathan Gottschall, The Storytelling Animal
Source: Author.
Luck
Skill
Source: iStockphoto.
Deliberate practice Process
Source: Wikimedia Commons; Harvard Business School Press; http://www.nndb.com/people/876/000024804/.
Favorite: Simplify
Little bets
Underdog: Complicate
Source: Wikimedia Commons; Harvard Business School Press; http://www.nndb.com/people/876/000024804/.
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