Reality is Mostly Random

A lot of what happens to us—success in our careers, in our investments, in our life decisions, both major and minor—is as much the result of random factors as the result of skill, preparedness, and hard work. So the reality that we perceive is not a direct reflection of people and circumstances that underlie it but is instead an image blurred by randomizing effects of unforeseeable or fluctuating external forces. That is not to say that ability doesn’t matter; it is one of the factors that increase the chances of success—but the connection between actions and results is not as direct as we might like to believe.

Thus our past is not so easy to understand, nor is our future so easy to predict, and in both enterprises, we benefit from looking beyond the superficial explanations.

Extraordinary Is Not Extraordinary

When we look at extraordinary accomplishments in sports—or elsewhere—we should keep in mind that extraordinary events can happen without extraordinary causes. It is easy to believe that the ideas that worked were good ideas, that plans that succeeded were well-designed, and that ideas and plans that did not were ill-conceived. And it is easy to make heroes out of the most successful and to glance with disdain at the least. But ability does not guarantee achievement, nor is achievement proportional to ability. And so it is important to always keep in mind the long term in the equation—the role of chance.

Details Falsely Increase Our Confidence

Kahneman and Tversky, “If the details we are given fit our mental picture of something, then the more details we are given in a scenario, the more real it seems and hence the more probable we consider it, even though any act of adding less-than-certain details to a conjecture makes the conjecture less probable.”

Availability Bias Distorts the Past

When reconstructing the past, we give unwarranted importance to memories that are most vivid and hence most available for retrieval. For example, people tend to overestimate the fraction of homeless people who are mentally ill because when they encounter a homeless person who is not behaving oddly, they don’t take notice.

Benford’s Law is Wild

According to Benford’s law, rather than all nine digits appearing with equal frequency, the number 1 should appear as the first digit in data about 30% of the time, the digit 2 about 18% of the time, and so on, down to digit 9.

Conspiracy Theorists Forget About Conditional Probability

Conspiracy theories often depend on the misunderstanding of this logic... confusing the probability that a series of events would happen if it were a product of a huge conspiracy with the probability that a huge conspiracy exists if a series of events occurs.

Probability Predicts From Odds; Statistics Finds Odds

It defines the fundamental difference between probability and statistics: the former concerns predictions based on fixed probabilities; the latter concerns the inference of those probabilities based on observed data. Given a series of measurements, what is the best guess you can make of the true value of the measured quantity, and what are the chances that this guess will be near the true value, however demanding you are in your definition of near?

Every Measure Has Doubt We’ve Ignored

It is one of those contradictions of life that although measurement always carries uncertainty, the uncertainty in measurement is rarely discussed when measurements are quoted.

Perfect Order Signals Deception

Patterns of randomness are so reliable that in certain social data, their violations can be taken as evidence of wrongdoing.

Most Business Success Is Also Random

In fact, economists like W. Brian Arthur argue that a concurrence of minor factors can even lead companies with no particular edge to come to dominate their competitors. "In the real world," he wrote, "if several similarly sized firms entered a market together, small fortuitous events—unexpected orders, chance meetings with buyers, managerial whims—would help determine which ones received early sales and, over time, which came to dominate. Economic activity is [determined] by individual transactions that are too small to foresee, and these small random events could accumulate and become magnified by positive feedback over time.”