Why are bad economic occurrences generally seen as being due to “sod's law” when some economic actors are capable of greatly influencing outcomes?


There are a few angles to this IMO, depending on who is making the observation. For an entrepreneurial business owner, there is often a requisite character trait of eternal optimism that can often ignore variables with proven downsides. In a large bureaucratic corporation, there is an institutional inertia and arrogance that often refuses to adjust to new variables, even if they are known to be toxic. For macroeconomics geeks and policy wonks, there can be a deeply entrenched investment in a given economic philosophy that may prevent them from admitting certain variables exist at all - let alone admitting that they might have a predictable negative impact.

And for all of these players, we can reliably observe a “partial reinforcement” phenomenon: because their business strategy or ideology succeeded (or endured) in one situation with a given risk characteristic, they often assume this can happen again. This is why people gamble. And when the environment is dynamic and variable as in most business environments, the PREE (i.e. resistance to letting go of a belief that X behavior will produce Y outcomes, and ceasing the behavior) is amplified. Instead of recognizing this, folks will blame outcomes on Sod’s law (or Murphy’s law here in the States) - it’s a sort of confirmation bias. But you are quite correct that, in many cases, a negative outcome is entirely avoidable - even statistically inevitable. But just try telling a habitual gambler that.

My 2 cents.

From Quora question: https://www.quora.com/Why-are-bad-economic-occurrences-generally-seen-as-being-due-to-%E2%80%9Csods-law%E2%80%9D-when-some-economic-actors-are-capable-of-greatly-influencing-outcomes

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