AUTHOR=Liu Chengwei , Tsay Chia-Jung 

TITLE=A normative theory of luck

JOURNAL=Frontiers in Psychology

VOLUME=Volume 14 - 2023

YEAR=2023

URL=https://www.frontiersin.org/journals/psychology/articles/10.3389/fpsyg.2023.1157527

DOI=10.3389/fpsyg.2023.1157527

ISSN=1664-1078

ABSTRACT=Psychologists have identified heuristics and biases that can cause people to make assumptions about causes and patterns in phenomena that actually result from randomness. Yet interpretation of these biases becomes ambiguous when they represent reasonable cognitive shortcuts that offer certain advantages. This paper addresses this ambiguity by presenting a normative theory of luck that integrates insights from psychology with the chance model approach to predict the circumstances under which performance non-monotonicity occurs: higher performance may not only indicate greater luck, but also lower expected merit. We offer an illustrative application of this theory by examining the decoupling of citations of academic publications and their impact, illuminating when citations can be an unreliable indicator of impact or merit. We discuss the implications of a normative theory of luck, including how to remedy or arbitrage the ways people mistake luck for skill.