Saturday, January 28, 2017

How To Be Lucky

From Nautil.us:

It pays to imagine your life is on a winning streak. 

“Luck is believing you’re lucky.”
—Tennessee Williams, A Streetcar Named Desire
In 1995, a wounded 35-year-old woman named Anat Ben-Tov gave an interview from her hospital room in Tel Aviv. She had just survived her second bus bombing in less than a year. “I have no luck, or I have all the luck,” she told reporters. “I’m not sure which it is.”

The news story caught the eyes of Norwegian psychologist Karl Halvor Teigen, now an emeritus professor at the University of Oslo. He had been combing through newspapers to glean insights into what people consider lucky and unlucky. Over the following years, he and other psychologists, along with economists and statisticians, would come to understand that while people often think of luck as random chance or a supernatural force, it is better described as subjective interpretation.

“One might ask, do you consider yourself lucky because good things happen to you, or do good things happen to you because you consider yourself lucky?” says David J. Hand, author of The Improbability Principle, emeritus professor of mathematics and a senior research investigator at Imperial College, London.
One of the easiest measures you can take to improve your luck is to shake things up.
Psychology studies have found that whether you identify yourself as lucky or unlucky, regardless of your actual lot in life, says a lot about your worldview, well-being, and even brain functions. It turns out that believing you are lucky is a kind of magical thinking—not magical in the sense of Lady Luck or leprechauns. A belief in luck can lead to a virtuous cycle of thought and action. Belief in good luck goes hand in hand with feelings of control, optimism, and low anxiety. If you believe you’re lucky and show up for a date feeling confident, relaxed, and positive, you’ll be more attractive to your date.

Feeling lucky can lead you to work harder and plan better. It can make you more attentive to the unexpected, allowing you to capitalize on opportunities that arise around you. In a study comparing people who consider themselves lucky or unlucky, psychologist Richard Wiseman of the University of Hertfordshire, author of the 2003 book The Luck Factor, asked subjects to count the pictures in a newspaper. But there was a twist: He put the solution on the second page of the newspaper. “The unlucky people tended to miss it and the lucky people tended to spot it,” he writes.

On the other hand, feeling unlucky could lead to a vicious cycle likely to generate unlucky outcomes. Psychologist John Maltby of the University of Leicester hypothesized that beliefs in being unlucky are associated with lower executive functioning—the ability to plan, organize, and attend to tasks or goals. In a 2013 study, he and colleagues found a link between a belief in being unlucky and lower executive function skills like switching between tasks and creative thinking. Then in 2015, he and other colleagues found more electrical activity related to lower executive function in the brains of 10 students who believed themselves very unlucky than in the brains of 10 students who believed themselves very lucky. “People who believe in bad luck didn’t necessarily engage in some of the processes that are needed to bring about positive outcomes,” Maltby says.

He offers a simple example of running out of ink in the middle of a print job. “The lucky person will have got a spare cartridge just in case because they have planned ahead. When the cartridge runs out they’ll say, ‘Oh, aren’t I lucky, I bought one earlier, that’’ fantastic,’ ” Maltby says. “However, the unlucky person won’t have planned ahead, won’t have done the cognitive processes, so when the printer cartridge runs out and they’re left with something to print, they go, ‘Oh, I’m so unlucky.’ ”

If this kind of vicious cycle takes hold, it can make a big difference. Economists Victoria Prowse and David Gill of Purdue University think responses to bad luck might even explain part of the gender gap seen in the workforce. In a lab experiment using a competitive game that involved both skill and luck, they found that women were more discouraged by bad luck than men. After experiencing bad luck, women had a greater tendency to reduce the amount of effort they put into the next round of the competition, even when the game’s stakes were small....MUCH MORE
Previously:
"The Deceptions of Luck"
How Luck Works
"Luck vs. skill: What Bill Gross and Bill Miller have in common"
Investing Tips From the Dalai Lama
The Market Pays Luck as Well as Skill
Oaktree's "Howard Marks on Luck and Skill in Investing"
Remember When the Unluckiest Man in the World Won the Lottery?
 "5 things you didn't know about luck"
How Big Data and Poker Playing Bots Are Taking the Luck Out of Gambling
Testing For Luck 
More on The Top Earning Hedge Fund Managers and The Metaphysics of Moolah
Fama/French: "Luck versus Skill in Mutual Fund Performance" (LMVTX)
A Glossary of Luck
"Luckiest Woman on Earth" who Won Lottery Four Times Outed as Stanford University Statistics PhD 
Gaming the System: Are Hedge Fund Managers Talented, or Just Good at Fooling Investors?