In the realm of decision-making, our minds are prone to various cognitive biases that can lead us astray. One such bias is Survivorship Bias, which refers to our tendency to focus on successful outcomes or observations while ignoring the failures or entities that have fallen by the wayside. This blog post aims to explore the Survivorship Bias mental model, explaining its definition, relevance in decision-making processes, its anchoring in human psychology, and its prevalence in our day-to-day lives.
Defining Survivorship Bias
Survivorship Bias is the cognitive bias that occurs when we concentrate on the people or things that have “survived” or succeeded, while overlooking those that have failed or been eliminated from the picture. It is a form of selection bias that distorts our perception of reality by only considering the visible winners and neglecting the silent losers.
The Relevance of Survivorship Bias in Decision-Making
Survivorship Bias has significant implications for decision-making processes. By focusing solely on the successes and disregarding the failures, we create an incomplete and skewed understanding of the factors contributing to success. This bias can lead to irrational decision-making and hinder our ability to learn from past mistakes or consider the full range of possibilities.
Examples of Survivorship Bias
- Personal Life Decisions: Consider the case of aspiring entrepreneurs who read success stories of self-made billionaires. They may only see the glamorous outcomes and overlook the countless failed ventures that never made it to the headlines. By fixating on the success stories, individuals may be tempted to overlook the risks and challenges involved in entrepreneurship, leading to poor decision-making and unrealistic expectations.
- Business Scenarios: In the business world, Survivorship Bias can affect market analysis and investment decisions. Investors may be drawn to success stories of companies that have achieved exponential growth, such as tech giants. However, this bias can blind them to the many failed startups and the underlying risks associated with investing in such ventures. Ignoring the failures can lead to overestimating the chances of success and making misguided investment choices.
- Public Policy-Making: Survivorship Bias can also impact public policy-making. Governments may base policies and regulations on successful case studies or industries, while neglecting the sectors that have failed or faced significant challenges. By focusing on the winners, policymakers may fail to consider the broader systemic issues that contribute to both success and failure, leading to policies that are ineffective or skewed towards specific interests.
Mental Biases Contributing to Survivorship Bias
Survivorship Bias is intertwined with several other cognitive biases, including Availability Heuristic, Confirmation Bias, and Illusory Correlation. Availability Heuristic leads us to rely on readily available information and examples, which are often biased towards success stories. Confirmation Bias reinforces our preconceived beliefs by seeking evidence that supports our existing ideas and filtering out contradictory information. Illusory Correlation contributes to Survivorship Bias by creating a false association between success and certain attributes or actions.
Psychological Underpinnings and Interplay
Survivorship Bias finds its roots in human psychology, specifically our desire for success, admiration, and a sense of security. Our minds are naturally drawn to narratives of triumph, and we tend to emulate and seek patterns in successful individuals or entities. Additionally, our inclination to avoid the discomfort of failure and our limited attention spans contribute to the prevalence of Survivorship Bias in our decision-making processes.
Identifying and Avoiding Survivorship Bias
- Expand Your Sample Size: Make a conscious effort to gather data and examples from a wider pool, including both successful and failed outcomes. Look beyond the highlights and seek out the stories of those who did not succeed. By considering the full spectrum of experiences, you can gain a more comprehensive and realistic perspective.
- Question the Narrative: Challenge the prevailing success narratives by critically examining the underlying factors that may have contributed to both successes and failures. Seek out alternative explanations and factors that may have been overlooked due to Survivorship Bias.
- Embrace Failure as a Learning Opportunity: Cultivate a mindset that embraces failure as a valuable learning experience. Understand that failures provide valuable insights and lessons that can contribute to future success. Encourage a culture of learning from failures, both in personal and organizational contexts.
- Seek Diverse Perspectives: Engage with individuals who have different experiences and perspectives. By seeking out dissenting opinions and alternative viewpoints, you can challenge your own biases and broaden your understanding of the complexities involved in decision-making.
Survivorship Bias is a prevalent cognitive bias that skews our perception of reality by focusing on success and ignoring failures. By recognizing the presence of Survivorship Bias and understanding its impact, we can avoid making irrational decisions and develop a more nuanced understanding of success and failure. The examples discussed in this blog post highlight how falling prey to Survivorship Bias can lead to poor decision-making in personal life, business, and public policy domains. By employing strategies to identify and mitigate Survivorship Bias, such as expanding our sample size, questioning narratives, and embracing failure as a learning opportunity, we can make more objective and informed decisions. Being aware of Survivorship Bias and actively working to overcome it can lead to better decision-making outcomes and a more accurate understanding of the complex factors contributing to success and failure.