Talent versus luck: The role of randomness in success and failure

Abstract

The largely dominant meritocratic paradigm of highly competitive Western cultures is rooted on the belief that success is mainly due, if not exclusively, to personal qualities such as talent, intelligence, skills, smartness, e®orts, willfulness, hard work or risk taking. Sometimes, we are willing to admit that a certain degree of luck could also play a role in achieving signicant success. But, as a matter of fact, it is rather common to underestimate the importance of external forces in individual successful stories. It is very well known that intelligence (or, more in general, talent and personal qualities) exhibits a Gaussian distribution among the population, whereas the distribution of wealth often considered as a proxy of success follows typically a power law (Pareto law), with a large majority of poor people and a very small number of billionaires. Such a discrepancy between a Normal distribution of inputs, with a typical scale (the average talent or intelligence), and the scale-invariant distribution of outputs, suggests that some hidden ingredient is at work behind the scenes. In this paper, we suggest that such an ingredient is just randomness. In particular, our simple agent-based model shows 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 averagely talented but sensibly luckier individuals. As far as we know, this counterintuitive result although implicitly suggested between the lines in a vast literature is quantied here for the rst time. It sheds new light on the e®ectiveness of assessing merit on the basis of the reached level of success and underlines the risks of distributing excessive honors or resources to people who, at the end of the day, could have been simply luckier than others. We also compare several policy hypotheses to show the most e±cient strategies for public funding of research, aiming to improve meritocracy, diversity of ideas and innovation.