Game of skill or game of luck? Distant search in response to performance feedback

Poker Superstars : Skill or Luck ? Similarities between golf — thought to be a game of skill — and poker

The popularity of poker has exploded in recent years. The premier event, the World Series of Poker Main Event, which costs $10,000 to enter, has increased from a field of six in 1971 to 839 in 2003 and 5,619 in 2005. Broadcasts of poker tournaments can frequently be found on television stations such as ESPN, Fox Sports, the Travel Channel, Bravo, and the Game Show Network. These tournaments con...

Mutual Fund Performance: Luck or Skill?

Should individuals include actively managed mutual funds in their investment portfolios? They should if and only if the result of active management is superior performance due to skill. This paper employs a previously ignored statistical technique to detect whether skill drives the superior performance of some mutual funds. This technique, the generalized binomial distribution, models a sequenc...

Skill or Luck? Search Frictions and Wage Differentials

The paper seeks to explain a collection of empirical regularities concerning inter– and intra–industrial wage differentials. For example, the model is consistent with the following well established set of observations: (i) Controlling for other variables, the wage of displaced workers is strongly related both to the characteristics of the pre– displacement employer and the characteristics of th...

The performance of football club managers: skill or luck?

Skill or Luck? Biases of Rational Agents

This paper shows why, in a world with differing priors, rational agents tend to attribute their own success more to skill and their failure more to bad luck than an outsider. It further shows why each agent in a group might think he or she is the best, why an agent might overestimate the control he has over the outcome, and why two agents’ estimated contributions often add up to more than 100%....