Feb 21, 2026
Summary
In this episode, Andy talks with Wharton economist Judd Kessler, author of Lucky by Design: The Hidden Economics You Need to Get More of What You Want. If you have ever looked at someone else’s career success and thought, “They just got lucky,” this conversation will give you a new lens. Judd introduces the idea of “hidden markets,” the informal rules and systems that shape who gets opportunities, access, and scarce resources, even when money is not changing hands.
They explore how leaders can evaluate allocation rules using Judd’s three Es (equitable, efficient, and easy), why first come, first served “races” often reward availability more than merit, and how waiting lists can quietly shift costs onto the people least able to pay them. You will also hear Judd’s “settle for silver” strategy, a practical way to make smarter choices in competitive markets, plus a thoughtful parenting angle on teaching kids to notice rules and incentives early.
If you're looking for a fresh, research-backed perspective on how hidden rules shape who gets opportunities at work and in life, this episode is for you!
Sound Bites
- “The goal of the book is to get people to start to recognizing these markets all around us.”
- “In most of these markets, they play by a simple rule that we all understand, which is if you're willing to pay for the thing, then you get it.”
- “Is the way that we're deciding who gets what... is it equitable? Is it efficient? And is it easy for market participants?”
- "I open my calendar and I see all these recurring meetings on my calendar, recurring meetings that were set up years or months ago. That's first in time, first in right."
- "If you understand the rules and develop strategies to get what you want from the market, then you actually can be one of the handful that actually gets the thing, that desirable outcome, and then it will look like you got lucky."
- “It's always going to be the folks who are in the market winning who are always going to think that it's fair.”
- “Once you start thinking like, how am I actually allocating these things? That's when you've put on that market designer hat.”
- “They'll come to you kind of with half-baked ideas because they know if they wait later on until they can fully bake the idea that the resources or the fun parts of the project might already be gone.”
- “Part of what the Settle for Silver / Go for Gold Strategy is forcing you to do, is to think seriously about what you want and why you want it.”
- “You, as a parent, you are designing the markets that your kids play in all the time.”
- "We're not breaking the rules, but we are figuring out what they are so that we can put ourselves in a good position, and that's going to serve you well."
- "Maybe by being in the office, you are signaling your dedication to the firm that you're available for all of these opportunities."
- "If it's something that anybody can do, like send a quick email, right? That's, it's not actually costly. Anybody could send that email even if they're not truly dedicated and eager for the opportunity."
- "You cannot get all three E's for sure in any allocation mechanism. There's always going to be tradeoffs."
Chapters
- 00:00 Introduction
- 01:41 Start of Interview
- 01:49 Growing Up and Thinking About Luck
- 03:00 Introducing Hidden Markets
- 07:10 The Three E's: Equitable, Efficient, and Easy
- 08:08 Live Event Tickets as a Case Study
- 12:50 High Frequency Trading and Hidden Races
- 15:21 Common Misunderstandings of the Three E's
- 17:04 Races Inside Organizations and Project Teams
- 20:25 Proximity, Signaling, and Opportunity at Work
- 23:03 Are We Selecting for the Right Behavior?
- 25:41 Stepping Back to Evaluate Your Own Systems
- 25:52 Colorado River Water Rights and Recurring Meetings
- 29:09 The Settle for Silver Strategy
- 30:57 The French Laundry Reservation Story
- 32:51 Settle for Silver in College Admissions
- 37:22 Helping Kids Recognize Rules and Incentives
- 41:03 End of Interview
- 41:32 Andy Comments After the Interview
- 44:34 Outtakes
Learn More
You can learn more about Judd and his work at JuddBKessler.com/book.
For more learning on this topic, check out:
- Episode 265, a short video episode Andy put together about the topic of luck. Check it out!
- Episode 339 with Katy Milkman. Katy is the person who gave Andy the heads-up about Judd's book. In episode 339, they talk about her book How to Change: The Science of Getting from Where You Are to Where You Want to Be. It's a great discussion with another researcher who knows how to make the learning practical for all of us.
- Episode 372 with Annie Duke. Annie is a former world champion poker player who is a big fan of Judd's book. How does a poker player think about luck? Check out episode 372 to find out!
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Talent Triangle: Power Skills
Topics: Luck, Hidden Markets, Behavioral Economics, Leadership, Decision Making, Resource Allocation, Organizational Design, Career Strategy, Signaling, Systems Thinking, Equity, Project Management
The following music was used for this episode:
Music: Echo by
Alexander Nakarada
License (CC BY 4.0): https://filmmusic.io/standard-license
Music: Fashion
Corporate by Frank Schroeter
License (CC BY 4.0): https://filmmusic.io/standard-license