Of Exams, Luck and the Paradox of Skill


In last week’s column, I wrote about the role that luck, skill and hard work, play in exams. In this column, I plan to get into a little more detail on the issue.

Over the last few years, the media has made it a habit to splash the pictures of toppers of competitive exams as well as board exams (10th and 12th standards). Other than the fact that any sort of success needs to be recognised, such columns make for an inspirational read, particularly in cases where the toppers come from a poor family.

When it comes to competitive exams (from engineering exams to UPSC exams), there are magazines which interview toppers, in the hope of finding out the formula for success, so that their readers can benefit. And typically, most such news stories and interviews have more or less standard reasons being offered for success. These are hard work, family support and following a regular routine.

Of course, topping exams needs hard work and family support. But are these the only reasons? And if that is the case, how come two equally intelligent candidates, putting in the same amount of hard work and having the same level of family support, don’t perform at the same level in any exam? Because there is something known as the paradox of skill at work.

As Michael Mauboussin writes in The Success Equation—Untangling Skill and Luck in Business, Sports and Investing: “As skill improves, performance becomes more consistent, and therefore luck becomes more important… In other words, if everyone gets better at something, luck plays a more important role in determining who wins.”

Mauboussin offers the example of a company. As he writes: “A company can improve its absolute performance, for example but it will remain at a competitive parity if its rivals do the same.” In this situation whether the company does better than its rivals, depends on luck. As Mauboussin writes: “When everyone in business, sports, and investing copies the best practices of others, luck plays a greater role in how well they do.”

How does this apply in the context of exams? Most people prepare for exams these days by going to coaching institutes and if not that, at least using study material provided by coaching institutes. This is typically true more for competitive exams. But it is also true for board as well as BA/BSc/BCom exams in many states.

Given this, a significantly large pool of candidates which has access to the same study material and is also more or less equal on other parameters, faces the paradox of skill. In this situation, who comes out on top or even qualifies in a competitive exam, depends on their luck on the day of the exam.

Let me give you an example from my life. When I first wrote the Common Aptitude Test (CAT) for admission into the IIMs and other MBA colleges, I had prepared decently for the exam. The city that I grew up in did not have a CAT exam centre. So, I had to go to another city to write the exam. I spent a sleepless night in the hotel overnight. And this clearly had an impact on my performance in the exam.

If the examination centre had been in the same city that I grew up in, my performance in the exam would have been significantly better. But this was how the luck of the draw turned out.

The same logic applies to toppers as well. Of course, they need to work hard, but they also need to be lucky on day of the exam. This could mean anything from sleeping well overnight to being able to reach the exam centre on time to not becoming obsessed with a question they are not able to solve.

The media focus on the toppers does injustice to many others who do not come out on top, but are equally intelligent. It’s just that on the day of the exam things didn’t work out as well for them, as they did for the toppers. And there is no second chance.

The column originally appeared on June 28, 2017 in the Bangalore Mirror.




About vivekkaul
Vivek Kaul is a writer who has worked at senior positions with the Daily News and Analysis(DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System , the latest book in the trilogy has just been published. The first two books in the trilogy were published in November 2013 and July 2014 respectively. Both the books were bestsellers on Amazon.com and Amazon.in. Currently he works as an economic commentator and writes regular columns for www.firstpost.com. He is also the India editor of The Daily Reckoning newsletter published by www.equitymaster.com. His writing has appeared across various other publications in India. These include The Times of India, Business Standard,Business Today, Business World, The Hindu, The Hindu Business Line, Indian Management, The Asian Age, Deccan Chronicle, Forbes India, Mutual Fund Insight, The Free Press Journal, Quartz.com, DailyO.in, Business World, Huffington Post and Wealth Insight. In the past he has also been a regular columnist for www.rediff.com. He has lectured at IIM Bangalore, IIM Indore, TA PAI Institute of Management and the Alliance University (Bangalore). He has also taught a course titled Indian Economy to the PGPMX batch of IIM Indore. His areas of interest are the intersection between politics and economics, the international financial crisis, personal finance, marketing and branding, and anything to do with cinema and music. He can be reached at vivek.kaul@gmail.com

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