Statistics and simulation show that wealth is just pure luck

February 21, 2022 - Reading time: ~1 minute

A recent article  "Talent vs. Luck: The Role of Randomness in Success and Failure" published in  Advances in Complex Systems Vol. 21, No. 03n04, 1850014 (2018) (arxiv.org/abs/1802.07068) shows that, according the a new computer model of wealth creation, the most successful people are not the most talented, just the luckiest.  The developed computer model accurately reproduces the wealth distribution in the real world. One of the most important conclusions of this simulation is that the wealthiest individuals are not the most talented (although they must have a certain level of talent). They are the luckiest.

The authors claim: “It is evident that the most successful individuals are also the luckiest ones ..  And the less successful individuals are also the unluckiest ones ... An important result of the simulations is that the most successful agents are almost never the most talented ones, but those around the average of the Gaussian talent distribution - another stylised fact often reported in the literature. The model shows the importance, very frequently underestimated, of lucky events in determining the final level of individual success".