Luck and Splitting Hairs in the NBA Finals and Life

For the next few weeks, one thing in the world of sports is certain. Sportscasters will spend hours upon hours explaining why the Heat beat the Spurs in Thursday's' NBA Finals.

Sportscasters will haphazardly spit out theories about LeBron James' determination, Tim Duncan's emotionally cracking, or maybe even the "destiny" of the Miami Heat. Who knows, they might even credit rapper Pitbull's "Feel This Moment" Miami Heat remix as an inspiring source of the Heat win.

However, the sportscasters will miss one of the most important things that helped The Heat win: a little bit of luck.

The Heat so barely outperformed the Spurs to win the NBA Finals, one cannot attribute a single reason to explain this small difference. Had a Tim Duncan's lay up fell just a few inches differently, the NBA Finals could have easily ended differently.

When a competition is this close, one cannot claim there is a significant difference.

For instance, imagine that you saw two random people named Hurt and Spencer playing a series of pool games at a bar. They each won three games and then their series all came down to a decisive game seven. The last game was decided by the last few balls as Hurt narrowly edged out Spencer.

Would you really be confident that Hurt is unquestionably better than Spencer at pool? How confident would you be that if the two played again, that Hurt would win the second series?

If you are rational, you would not be at very confident that Hurt would win again.

When statisticians observe a difference in the average number wins and there are only a few observations (e.g. less than ten), statisticians know the variance is too high to confidently conclude which party is better.

However, people don't often think like statisticians. People tend to form strong opinions about other people, teams, ethnicities, and products based on a tiny amount of information. They also tend to only consider recent information -- for instance the last 5 minutes of a basketball game instead of an entire game or series.

People and even businesses often make terrible mistakes because they ignore the rule of large numbers -- the statistical rule that states to determine small differences between two items, you need many observations, for instance an entire season of games.

This is why some people argue that soccer leagues across the world actually have the best format to determine a true winner. In soccer leagues such as the British Premiere League, there are no playoffs. The yearly championship goes to the team that collects the most points over the season. This leads to a better sense of the rule of large numbers, but does mean viewers will miss out on a thrilling playoff.

The Heat are indeed mostly likely a better team than the Spurs. However, the difference between these two teams is tiny if at all there.

Just like people often have a desire to believe that everything happens for a reason, sportscasters and sports fans like to come up with reasons for everything in a sporting event. This desire is known by psychologists as the "Need for Structure," defined as the tendency to want to perceive order, rules, and meaning in the world.

Yet, often the reason something happens is because there is no reason -- it's just luck. It's just a roll of the dice.

When we realize how random life and sports actually are, we can make better decisions. We can make better bets on what sports teams, employees, and products will perform well in the future.

Understanding the role of luck and randomness in life is one of the most important lessons a person can learn. However people tend to not want to learn this lesson. It's more enjoyable to believe one can easily figure it out and understand the reason behind every event.

The Spurs tested the Heat, but the Heat prevailed not because they were a team destined to win or a team that was entirely "on a different level" than the Spurs. The Heat won because that are probably a little bit better and luck smiled on them. If luck had smiled just a little bit more in the other way, the Heat might have lost.