My status on this is that the model could be a good model, but that hasn't been established. You cannot reason from "the outcomes look like reality" to "the parameters and mechanisms in the model are the same as the parameters and mechanisms in reality." That is backwards.
One thing you can say is, "IF reality's parameters and mechanisms are like this model's, you would expect the outcome that we in fact observe in reality." This is evidence, if not particularly strong evidence. There are infinitely many models that lead to the similar outcomes that we observe in reality, and an even larger infinitely many models that don't.
Their model is if you have a lucky event you have P(talent) chance of doubling your capital and if you hit an unlucky event your capital is halved. Any step in time where you neither experience luck or unluck you are left unchanged. It seems wrong on face for several reasons:
- You need to be "lucky" in order to ever increase your wealth, which makes the "finding" that luck is more important than talent completely obvious from the way the model was designed
- Capital only changes by multiplication and division, so the fact that this model "recreated" the power distribution we see in wealth in the world is obvious from the setup. It was designed to be a power distribution and couldn't be anything else
- Talent has no effect on your life during unlucky or neutral periods in their model. This obviously fails to conform to the real world.
tldr; they designed a power-distributed model where luck was clearly more important than talent, and "discovered" that it showed a power distribution where luck is more important than talent.
One thing you can say is, "IF reality's parameters and mechanisms are like this model's, you would expect the outcome that we in fact observe in reality." This is evidence, if not particularly strong evidence. There are infinitely many models that lead to the similar outcomes that we observe in reality, and an even larger infinitely many models that don't.