Examining survivorship bias and its dangers in human reasoning and decision-making through compelling stories. Emphasizes the importance of considering unseen evidence and challenges conclusions based on survivors. Explores survivorship bias using Abraham Wald's analysis of WWII airplanes as an example. Underscores the significance of considering all outcomes and hidden evidence in decision-making.
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Quick takeaways
Survivorship bias can lead to flawed conclusions and a skewed understanding of success, emphasizing the need to consider all outcomes and evidence.
To develop a better perspective on success rates, consult a Possibility Grid that takes into account both successful and unsuccessful outcomes of completed and not completed actions.
Deep dives
The Dangers of Survivorship Bias
Survivorship bias is a common flaw in human reasoning and decision-making. When studying success stories, we often overlook those who failed, leading to a skewed understanding of success. An example from World War II illustrates this bias: analysts examined returning bombers and found bullet holes in the tail, body, and wings. The conclusion was to reinforce those areas. However, statistician Abraham Wald pointed out that this overlooked the planes that were damaged beyond repair. The solution was to reinforce the unharmed regions, which greatly improved crew safety. To avoid survivorship bias, it is crucial to consider all outcomes and evidence, not just the successes.
Avoiding the Trap of Survivorship Bias
Survivorship bias can lead to incorrect conclusions and a distorted view of reality. We often focus on successful people or companies, neglecting to consider all the unsuccessful counterparts. It is important to examine both successful and unsuccessful examples to understand the true base rates of success. The podcast suggests using a 2x2 possibility grid, considering the outcomes of completing or not completing an action and whether there was success or failure. By acknowledging the unseen evidence, we can better evaluate decisions and avoid the pitfalls of survivorship bias.
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The Dangers of Survivorship Bias: Examining Stories and Challenging Assumptions
In a famous story, Cicero wrote of Diagoras, an atheist who, when confronted with paintings of people who prayed and then were saved from a shipwreck, replied, "I see those who were saved, but where are those painted who prayed and drowned?"
Survivorship Bias is the error resulting from systematically focusing on survivors (successes) and ignoring casualties (failures) that causes us to miss the true base rates of survival (the actual probability of success) and arrive at flawed conclusions.
To avoid the trap, we must consider the unseen evidence just as much as the seen. To develop a better perspective on base rates of success, consult a Possibility Grid, which lays out completed and not completed actions of both winners and losers.
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