Is Luck Subjective ?

Stockolio

Stockolio

https://aeon.co/essays/why-luck-might-be-subjective-and-not-part-of-the-world

Personality traits, then, help to determine whether one sees ambiguous-luck cases as good luck or bad luck. That’s one way in which the quirks of our psychology guide our judgments about luck, but it’s not the only one. In another study, Johnson and I explored the effect of framing on luck assessments. Framing is one of the irrational decision-making heuristics of our subconscious minds first described in 1981 by the psychologists Daniel Kahneman and Amos Tversky. Here’s one of their examples:

  • Would you accept a gamble that offers a 10 per cent chance to win $95 and a 90 per cent chance to lose $5?
  • Would you pay $5 to participate in a lottery that offers a 10 per cent chance to win $100 and a 90 per cent chance to win nothing?
Far more people are ready to say yes to the second question than to the first one, despite the fact that the two cases are identical – you have to decide whether to accept an uncertain prospect that will leave you richer by $95 or poorer by $5. Furthermore, the odds are the same both times. Why? Well, the second version talks only about winning, never about losing anything. Pay $5 to have a 10 per cent chance at winning $100? Sure, that sounds good. But accepting a gamble with a 90 per cent of losing $5? No way
 
Study participants read each vignette and then decided how lucky the subject of the story was. For example, in the first one, participants were provided with the prompt ‘Tara Cooper was: unlucky, somewhat unlucky, somewhat lucky, lucky. Circle one.’ There were similar instructions for the winter storm, and other examples. The positive and negative frames were scrambled so that everyone got some of each, but no one participant read both a positive and a negative version of the same case.

The results were striking. When Tara Cooper hit five out of six numbers in the lottery, practically everyone thought she was lucky to do so. But when she missed one out of six numbers in the lottery, that was universally judged to be bad luck, even though, of course, it was the identical event. The same pattern held for the other vignettes we provided. Two ways of describing equivalent things produced extremely different opinions about luck. Overall, when events were presented positively, participants considered the event ‘lucky’ 83 per cent of the time. The very same events when cast negatively were considered ‘lucky’ only 29 per cent of the time. The statistical p-value was < .001. Manipulating the words describing an event manipulates how people react to those events and whether they see them as lucky ( positive ) or unlucky ( negative ).
 
Stockolio said:
https://aeon.co/essays/why-luck-might-be-subjective-and-not-part-of-the-world

Personality traits, then, help to determine whether one sees ambiguous-luck cases as good luck or bad luck. That’s one way in which the quirks of our psychology guide our judgments about luck, but it’s not the only one. In another study, Johnson and I explored the effect of framing on luck assessments. Framing is one of the irrational decision-making heuristics of our subconscious minds first described in 1981 by the psychologists Daniel Kahneman and Amos Tversky. Here’s one of their examples:

  • Would you accept a gamble that offers a 10 per cent chance to win $95 and a 90 per cent chance to lose $5?
  • Would you pay $5 to participate in a lottery that offers a 10 per cent chance to win $100 and a 90 per cent chance to win nothing?
Far more people are ready to say yes to the second question than to the first one, despite the fact that the two cases are identical – you have to decide whether to accept an uncertain prospect that will leave you richer by $95 or poorer by $5. Furthermore, the odds are the same both times. Why? Well, the second version talks only about winning, never about losing anything. Pay $5 to have a 10 per cent chance at winning $100? Sure, that sounds good. But accepting a gamble with a 90 per cent of losing $5? No way
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The notions of "luck" and "subjectivity" are mutually exclusive... like mixing oil and water.

Besides, what does the concept of "luck" have to do with trading... other than your being on a position and a new fundamental development from out-of-the-blue "hits you"?

Luck is a concept for gambling. That is... "prevailing in spite of the odds being fixed, against you and there is no way you can put them in your favor."

Experiencing "good fortune in the markets"... because you did your work and were properly disciplined... has nothing to do with luck.
 
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Scataphagos said:
The notions of "luck" and "subjectivity" are mutually exclusive... like mixing oil and water.
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Actually, the other way 'round: "luck" only works in a subjective world -- there's no room for it in an objective reality.

That said, I always remember Arnold Palmer's (alleged) response to "Lucky shot!" on hitting a hole-in-one: "Funny, but the more I practice, the luckier I get."

:thumbsup::thumbsup:
 
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you win 10 million in a lottery. by betting 10 million you have a 90% chance of winning 100 million in another lottery. would you be willing to make that bet?
 
zdreg said:
you win 10 million in a lottery. by betting 10 million you have a 90% chance of winning 100 million in another lottery. would you be willing to make that bet?
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No. I want my ten million. However, if you give me the same odds but let me reduce my bet size to 1 million, and if you would allow the bet to be taken at least 7 times at my choice, I'd take that bet.
 
I presented an extreme example to make it understandable to the mathematically challenged. of course there are none on ET.:) +plus from a mathematical expectancy you should make the bet in my example.
 
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