Survivorship Bias [Post 22]

“Survivorship bias is a common logical error that distorts our understanding of the world. It happens when we assume that success tells the whole story and when we don’t adequately consider past failures” as described by Farnam Street blog.1

Perhaps the most renowned example of survivorship bias is from research done on World War II bomber aircraft that survived battle.

“This hypothetical pattern of damage of surviving aircraft shows locations where they can sustain damage and still return home. If the aircraft was reinforced in the most commonly hit areas, this would be a result of survivorship bias because crucial data from fatally damaged planes was being ignored.”2 It is instead the parts of the surviving planes that were collectively not hit that should be reinforced with armor.

There are all kinds of places survivorship bias comes up in daily life.

Architecture: Why do we perceive very old structures as more beautiful and built with more integrity than today’s structures?

Likely because all the ugly and poorly assembled buildings of the time have been demolished or deteriorated on their own.2

Celebrities: Doesn’t it seem like many celebrities were dropouts, runaways, or beat incredible odds to get where they are?

This may be true but for every 1 celebrity that hit it big there’s countless other individuals with similar experiences that did not climb to the same level of achievement.

Investments: If you invested $10,000 in Tesla stock in 2018 it might have multiplied 10x in 5 years… but what if instead you put $10,000 in any of the 13,481 companies that filed for bankruptcy in 2022?3

You would have $0 and a harder time looking at yourself in the mirror.

It is crucial to recognize there’s always going to be greener grass on the other side of whatever we examine if we only view the survivors. Behind every shining success story, there exists long lists of failures that have been forgotten about. Context is important when analyzing why something as a whole appears to stand out as exceptional.

1. Farnam Street. (n.d.). Survivorship Bias. Farnam Street. https://fs.blog/survivorship-bias/#:~:text=Survivorship%20bias%20is%20a%20common,t%20adequately%20consider%20past%20failures.

2. Wikipedia contributors. (2023, June 14). Survivorship bias. In Wikipedia. https://en.wikipedia.org/wiki/Survivorship_bias

3. Administrative Office of the U.S. Courts. (2023, February 6). Bankruptcy Filings Drop 63 Percent. In United States Courts. https://www.uscourts.gov/news/2023/02/06/bankruptcy-filings-drop-63-percent

Images: https://en.wikipedia.org/wiki/Survivorship_bias#/media/File:Survivorship-bias.svg