Prompt Cast
The Dangers of Survivor Bias in Decision Making
TLDR Survivor bias is a logical fallacy where conclusions are made based on a subset of data from survivors, ignoring the larger population. This bias can lead to incorrect conclusions in various fields, including military decisions, stock market performance, investment scams, and our perception of history.
Timestamped Summary
00:00
During World War II, statistician Abraham Vald recommended adding extra armor to American bombers in the exact opposite way the Army assumed, due to survivorship bias.
01:38
Survivor bias is a logical fallacy where an inference is made based on a subset of a population that meets certain criteria, as illustrated by the example of the Army Air Corps adding armor to bombers in World War II based on the locations of bullet holes on returning planes.
03:11
Survivor bias can lead to incorrect conclusions because it involves only looking at data from the survivors and ignoring the larger population, as demonstrated by the example of the Army Air Corps adding armor to bombers based on the locations of bullet holes on returning planes.
04:38
Survivor bias can also be found in the stock market, where the companies that underperform are removed from indexes like the Dow Jones before they can bring down the overall performance.
06:06
Survivor bias can also be found in investment scams, where newsletters selectively send correct predictions to a smaller group of people, making them believe the sender is an investing genius.
07:30
Survivor bias can also be found in how we perceive the past, as we tend to focus on the good things that have survived and ignore the bad things that have been forgotten or eliminated.
08:59
Survivor bias can lead to misconceptions about the effectiveness of helmets in the military and can also affect our perception of success in podcasting.
