Good Luck as a Limited Resource

Abstract

From getting caught in the pouring rain to winning the largest jackpot in history, people encounter a wide range of isolated random outcomes and attribute them to luck. What do they think follows a lucky outcome: another lucky outcome or an unlucky outcome instead? We explore how people believe a person’s luck operates over time and suggest that the magnitude of past luck determines whether people expect good luck to continue or reverse in the future. Across four pre-registered experiments (N = 2,192), we found that participants consistently predicted that those who had been extremely lucky in the past (e.g., won a huge prize or an unlikely prize) would more likely become unlucky in the future than those who had been moderately lucky in the past (e.g., won a small prize or a likely prize) would. These findings suggest that people seem to believe good luck operates like a limited resource one possesses that can be used up. Further evidence shows that the limited-resource mental model is specific to good luck; for past outcomes attributed to bad luck or good skill, participants did not hold this extremity-reversal expectation. This research advances the literature on intuitive thinking by revealing a novel mental model that captures how people believe luck operates over time and advances the literature on sequence predictions by providing more nuanced findings on when people expect a reversal and when they do not.

Keywords: magical thinking, judgment and decision-making, sequence prediction