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Survivorship Bias: The Tale of Forgotten Failures

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https://fs.blog/2019/12/survivorship-bias/

fs.blog

Survivorship Bias: The Tale of Forgotten Failures
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. There are thousands, even tens of thousands of failures for every big success in the world.

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Survivorship Bias

Survivorship bias is a logical error that twists our understanding of the world and leads to a wrong understanding of cause and effect.

We fall into survivorship bias when we assume that suc...

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Against the Odds

When we only pay attention to the exception above the normal, we end up misunderstanding reality. While there is much to learn from the anomalies, it would be a mistake to expect the same results f...

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Cause and Effect

Survivorship bias leads us to think that coincidence is a correlation. We want the encouragement from survivorship bias so we can believe in our own capabilities, but it results in an inflated idea...

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Survivorship Bias in Business

Statistics of market performance can be distorted when they focus on the rare successes while excluding companies which collapse.

Business books laud the rule-breakers who ignore conventional...

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Learning From Failure

Successful entrepreneurs teach us very little. We would do better by analyzing the causes of failure first and then the successes.

The huge failure rate for start-ups is often hidden. We will...

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Consider What You Don’t See

We can overcome survivorship bias by considering the things that started on the same path but didn't make it.  Try and figure out why they failed. If you're going to do something, make sure yo...

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Biases...

Biases...

... specifically cognitive biases, are your unchecked tendencies to make decisions or take actions in an irrational way. 

Instead of making decisions based on facts and data, you ...

Biases = shortcuts for processing information

The brain creates shortcuts in order to make fast decisions when it hits information or inspiration overload

These shortcuts form unconscious biases so it’s easier for your brain to categorize information and make quick judgments over and over again.

Self-serving Bias

It causes you to claim your successes and ignore your failures. 

This means that when something good happens, you take the credit, but when something bad happens, you blame it on external factors.

Self-serving bias may manifest at work when you receive critical feedback. Instead of keeping an open mind, you may put up a defense when your manager or team member is sharing feedback or constructive criticism.

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Normalcy bias

Underestimating the possibility of disasters occurring.  Thus, they don’t have an urgency to prepare for the worst. 

When disaster strikes, some people lose their heads, some...

Dealing with the normalcy bias

If people don't know how to deal with a situation, they can't begin to deal with it, so they don't deal with it.

This is why we're given countless safety lectures. Look at the exits and plan your exit route. In the event of an earthquake, a fire, a flood, do this. Drills and practices, even if only done in a person's imagination, at least give them the basic tools that they need when dealing with an emergency.

Survivorship bias refers to our tendency to focus on the winners while completely forgetting about the losers who are employing the same strategy.


Loss aversion refers to our tendency to strongly prefer avoiding losses over acquiring gains.

Loss aversion refers to our tendency to strongly prefer avoiding losses over acquiring gains.

Availability Heuristic appears when we assume that the examples coming to mind easily are the most prevalent.

Availability Heuristic appears when we assume that the examples coming to mind easily are the most prevalent.

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