1827: Survivorship Bias
Title text: They say you can't argue with results, but what kind of defeatist attitude is that? If you stick with it, you can argue with ANYTHING.
This comic is a parody of entrepreneurial speeches. Entrepreneurial speeches are talks, such as graduation commencements or motivational speeches. The idea behind graduation commencements is that the entrepreneur, having accumulated wisdom and experience in the process of becoming successful, will share his insights and experience to the students, in the hope that they learn lessons that will help them achieve success as well. Companies hire motivational speakers to motivate employees to work hard.
A common theme in these talks is that the entrepreneur succeeded by persisting through hardship, sometimes despite other people telling them they would be better off giving up. They advise students to do the same, and to keep pursuing their dreams even through subsequent failure. While this isn't necessarily bad business advice, this can give students a biased vision of reality, and lead them to imagine that they will succeed as long as they keep trying.
This comic makes a joke about survivorship bias, hence the title. Survivorship bias, or survival bias, is the logical error of concentrating on the people or things that "survived" some process and inadvertently overlooking those that did not because of their lack of visibility. This can lead to false conclusions in several different ways. The survivors may be actual people, as in a medical study, or could be companies or research subjects or applicants for a job, or anything that must make it past some selection process to be considered further. They may also have "survived" on only some of their attempts.
In this comic Hairy is giving a talk encouraging people to "never stop buying lottery tickets". This is an unwise investment plan, because the chances of winning the lottery are mathematically very low and the total payout is usually less than the total ticket sales, meaning the expected return from buying a lottery ticket is (almost) always negative. Survivorship bias applies in this situation since people who eventually win (and, presumably, win more than they've spent on lottery tickets in the time that it took them to win) are much more likely to give inspirational speeches than someone who never won or didn't win enough to make the "investment" worthwhile.
The obvious bad strategy (keep buying lottery tickets) is a metaphor for strategies that successful entrepreneurs recommend (keep persisting and putting money into your start-up); these strategies may be bad on average, but people who pursued them and succeeded are much more likely to be invited and give speeches than people who pursued them and went bankrupt (or people who pursued safer strategies and kept their money), making it appear to students that taking high risks and persisting in the face of expensive failure is the optimal strategy. And those who have done both, are more likely to speak about the successes than the failures and bankruptcies.
Randall says in the caption below the panel that people should be informed about survivorship bias before hearing inspirational talks from successful people.
The title text says "They say you can't argue with results, but what kind of defeatist attitude is that? If you stick with it, you can argue with ANYTHING." In the comic, the speaker's "result" was winning the lottery. Pointing out the survivorship bias is Randall effectively arguing with results, by pointing out that they were obtained randomly, and that it ignores all the other people who may have (foolishly) followed this same process, but never won the lottery. Taken a step further, one could use the survivorship bias to argue against the results of any process, be it research (Any given research process is bound to produce SOME good results, and since those are the only ones published, it is difficult to determine if the research process itself contributed to the good results), business decisions (Some businesses fail, and others succeed, but since only the successful ones stick around, it can be difficult to determine WHY they failed or succeeded), etc..
- [Hairy, holding an arm out towards an unseen crowd, is standing on a podium with five large bags around him, each having a dollar sign on it.]
- Hairy: Never stop buying lottery tickets, no matter what anyone tells you.
- Hairy: I failed again and again, but I never gave up. I took extra jobs and poured the money into tickets.
- Hairy: And here I am, proof that if you put in the time, it pays off!
- [Caption below the panel:]
- Every inspirational speech by someone successful should have to start with a disclaimer about survivorship bias.
- Lottery with positive return:
- When item prizes are donated to a lottery (for charity or advertising purposes), sometimes the value of those items may actually be larger than the total price for all of the lottery tickets, if you otherwise would be willing to pay full price for all the prizes.
- In some lotteries, if the jackpot gets too big -- or goes for too many drawings -- without anyone winning it, the jackpot amount gets "rolled down" and distributed across the lower prize levels. These can have a positive return on average -- but only on the drawings where the jackpot rolls down. People have formed investment groups to buy hundreds of thousands of tickets to exploit these; several such groups repeatedly profited from Massachusetts's Cash WinFall game especially. (The Massachusetts State Lottery has an official report (PDF, 144 KB) on how such high-volume betting affected the game.)
- Examples of survivorship bias:
- Diogenes was shown paintings of people who had escaped shipwreck: "Look, you who think the gods have no care of human things, what do you say to so many persons preserved from death by their especial favour?", to which he replied: "Why, I say that their pictures are not here who were cast away, who are by much the greater number."
- Many people were smoking back in the 1930-70s, thus almost everyone above 80 either smoked cigarettes or was at least subjected to massive passive smoking during those years. Thus anyone above that age could be claimed to prove that you can live a long life while smoking. But they consist of the small group of people that survived in spite of all the smoke, where large sections of those that would have been 80 today, died from cancer or heart disease caused by smoking, long ago, maybe even before they retired. But since these people are dead and gone many years ago, they do not speak up, and are thus the silent majority that is not heard, which is the problem with survivorship bias.
- During World War II, there was a study of the damage done to aircraft, and the recommendation was to add armor to the areas that showed the most damage. The statistician Abraham Wald noticed that the study didn't take into account aircraft that didn't return: the holes in the returning aircraft thus represented areas where a bomber could take damage and still return home safely.
- Anything created by an Earth-human in this universe. We think it's because we're special, rather than being special because we're here/we survived.
- In the title text, "defeatist" was originally misspelled as "defeatest". This was later corrected.
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