Passion Struck with John R. Miles

Episode 677: Judd Kessler on How to Become Lucky by Design
Release Date: October 16, 2025

Overview

In this episode of Passion Struck, host John R. Miles interviews Judd Kessler, Wharton professor and author of "Lucky by Design." The conversation uncovers how much of what is perceived as luck is actually shaped by hidden systems, markets, and rules that govern everything from college admissions and restaurant reservations to job offers and life’s daily opportunities. Kessler demystifies the concept of luck and offers actionable strategies to help listeners design more “luck” into their own lives by understanding—and working within—the structures that actually determine outcomes.

Main Topics and Discussion Breakdown

Hidden Markets and the Nature of Luck

• Luck is Not Random:

  • Kessler asserts that “most of what we call luck is actually the product of rules we don't see in systems we don't understand.” [08:35]
  • Example: Rock, paper, scissors with his young daughter as an allegory for how learning the rules of a system changes one’s agency and outcomes. [08:57]
  • Memorable Quote:
    • “These allocations that might seem like they're based on chance are actually being allocated in a hidden market. You have to understand its rules. And once you do that, you can then develop a strategy to actually succeed in those markets.” (Kessler, 10:35)

• Scarcity & Competition:

  • Hidden markets arise when scarcity prevents everyone from getting what they want, making rules of allocation critical.
    • Applies to French Laundry reservations, Taylor Swift tickets, elite elementary schools, and Ivy League admissions. [02:00, 14:07]

• The Invisible Race:

  • Recognizing that you’re in a competition is often the first step towards success:
    • “The first step to winning any race is realizing you’re in one.” (Kessler, 10:48)
  • Example: Restaurant reservations at The French Laundry and after-school programs hinge upon speed and timing—first come, first served. [11:27]

The Three E’s of Market Design: Equity, Efficiency, and Ease

• Framework Introduction:

  • Kessler introduces the “Three E’s”—Equity, Efficiency, and Ease—as central pillars to understanding and designing hidden markets. [18:24]
  • Definitions:
    • Efficiency: Allocating resources so nothing is wasted and ideally goes to those who value it most.
    • Equity: Ensuring fair treatment so that identical or similar participants have similar chances.
    • Ease: How simple and clear participation in the market is.

• Tension Between the Three E’s:

  • Rarely can markets achieve all three perfectly. Example: Lotteries are equitable and easy but not necessarily efficient. [25:07]
  • Transparency and Tradeoffs:
    • “Equity, efficiency, and ease rarely align. The best we can do is be transparent about the trade-offs.” (Kessler, 25:07)

• Real-World Examples:

  • Public school admissions, ticket sales, and organ transplants: Why price is not used, and how “hidden markets” step in to allocate scarce resources. [18:42-21:10]

Hidden Market Strategies: “Settling for Silver” & Agency

• Beyond Gold: Celebrating Second Best

  • The myth that only the “gold” outcome matters is pervasive—but suboptimal.
    • “The world is built to convince us that only gold matters. But often... second choice is the wiser one.” (Kessler, 30:30)
  • Example: Booking a reservation at The French Laundry—opting first for a more attainable slot (the “silver”) may yield a better result than going for the most competitive times and risking nothing. [30:30]
  • Applies to college applications and other competitive markets; sometimes, your best bet is prioritizing the second (or third) choice as if it’s the first. [30:30-33:38]
  • Quote:
    • “If getting the silver outcome is not that much worse and you’ve dramatically increased your chances of doing it, then in a lot of markets that’s going to be the right strategy.” (Kessler, 33:38)

• Clarity in “Choose Me” Markets

  • In two-sided markets (jobs, dating), signaling clarity rather than just “perfection” is key.
    • “It's not about being perfect, it's about being clear.” (Kessler, 35:56)
    • Employers and potential partners value evidence of specific, idiosyncratic interest over generic accolades or skills.
    • Cover letters and resumes should hint at unique interest or fit.

Signals, Strategy, and the Impact of AI

• Changing Job Markets:

  • With AI-generated cover letters and resumes saturating the market, authentic human connections and unique signaling become more vital. [39:22-42:16]
  • Advice:
    • Stand out not by the quality of generic documents, but by proactive outreach, networking, and signaling real intent.
      • Example: Directly reaching out to executives helped John land a coveted job at Lowe’s. [42:16-43:24]

• Analogies:

  • Grateful Dead ticket requests: Fans decorated envelopes to signal dedication and increase their chances. [43:24]

Personal Life, Fairness, and “Envy Freeness” in Domestic Labor

• Extending Market Design to Households:

  • “By the end of the book, I hope readers get that actually you are a market designer.” (Kessler, 45:01)

  • Kessler discusses “envy freeness,” a concept where tasks or resources are distributed so that neither party prefers the other’s load—a way to minimize resentment and increase perceived fairness. [45:01]

    • “We split up the tasks such that when we looked at what the other person was doing for the household, we thought, we do not want to switch these tasks. Like, we have achieved envy freeness.” (Kessler, 49:45)

  • Use of Eve Rodsky’s conception-planning-execution (CPE) model to make household labor more visible and fairly distributed. [45:30-47:25]

Practical Tips for Becoming “Lucky by Design”

Kessler’s Three-Point Plan: [51:31]

1. Recognize hidden markets in your life.
2. Learn the rules of these markets.
3. Develop personalized strategies based on your goals and market mechanics—sometimes going for gold, sometimes settling for silver, sometimes partnering or leveraging others.

“No matter what the market is... there is a strategy you can play where you will feel better about the outcome whether you get what you want or not.” (Kessler, 52:19)

Notable Quotes & Timestamps

• “Most of what we call luck is actually the product of rules we don't see in systems we don't understand.”
  — Judd Kessler [08:35]

• “The first step to winning any race is realizing you’re in one.”
  — Judd Kessler [10:48]

• “Equity, efficiency, and ease rarely align. The best we can do is be transparent about the trade offs.”
  — Judd Kessler [25:07]

• “The world is built to convince us that only gold matters. But often... second choice is the wiser one.”
  — Judd Kessler [30:30]

• "In a Choose Me Market, it’s not about being perfect, it’s about being clear."
  — Judd Kessler [35:56]

• "By the end of the book, I hope readers get that actually you are a market designer."
  — Judd Kessler [45:01]

Key Segments (Timestamps)

• [04:02] - Introduction to Judd Kessler and hidden markets
• [10:48] - The importance of recognizing you’re in a competition
• [14:07] - Scarcity markets in education and what parents/students should know
• [18:24] - Three E’s: Equity, Efficiency, Ease
• [25:07] - Navigating trade-offs among the three E’s
• [30:30] - “Settling for Silver” as a broad strategy
• [35:56] - Building clarity (not perfection) in applications and relationships
• [39:22] - AI’s impact on signaling in job markets
• [45:01] - Designing fairness at home: envy freeness and household labor
• [51:31] - Three-step plan to design your own luck

Conclusion & Takeaways

• Luck is less about chance and more about understanding and navigating unseen systems and rules.
• Learning to see and analyze the “hidden markets” at play in all areas of life—from job hunts and school admissions to parenting and relationships—can drastically expand your sense of agency.
• Utilize frameworks (Equity, Efficiency, Ease) to understand trade-offs in any allocation system.
• Design your own “luck” by mastering the rules, developing tailored strategies, and sometimes embracing second-best outcomes.

For further learning:

• Visit juddbkessler.com or find "Lucky by Design" at your preferred bookseller.

(Skip to [51:31] for Kessler’s actionable steps on becoming “lucky by design.”)