3 Elements – Games Vs. Life

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Element 1: Availability of information

Element 2: Skill

Element 3: Luck

Game of Chess:

Information is available -Yes, both players can see all the moves on the chess-board

Skill required-Yes

Involvement of luck -No

Game of Cards (Flesh):

Information is available -No, one does not know about the cards in other players’ hands

The skill required- Yes, how long you should hold and how big bet you should place when you’ve week cards or you have the best cards

Involvement of luck -Yes, what kind of cards you get

Game of Roullete :

Information is available -Yes, the wheel rotates in front of everyone

The skill required- No, you just place your bet on any number

Involvement of luck -Yes, where the ball would stop no-one knows

Observations :

  1. Where no skill is required, the outcome purely depends on luck
  2. Many times, even if the skill is required, luck can still play a role
  3. The role of luck does not wholly undermine the role of skill
  4. The ability to deal with hidden information is also somewhat related to skill

These lessons (importance of developing a skill) are easily applicable in the game of investing or in case of finding a solution where information is not completely available.

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