Abraham Wald and the Missing Bullet Holes
Last updated: December 12, 2024 Read in fullscreen view
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You may not know the name Abraham Wald, but he has a very valuable lesson you can apply to problem solving, engineering, and many other parts of life. Wald worked for the Statistical Research Group (SRG) during World War II. This was part of a top secret organization in the United States that applied elite mathematical talent to help the allies win the war. Near Columbia University, mathematicians and computers - the human kind - worked on problems ranging from how to keep an enemy plane under fire longer to optimal bombing patterns.
One of Wald’s ways to approach problem was to look beyond the data in front of him. He was looking for things that weren’t there, using their absence as an additional data point. It is easy to critique things that are present but incorrect. It is harder to see things that are missing. But the end results of this technique were profound and present an object lesson we can still draw from today.
What Abraham Wald found was a logical error known as Survival Bias
To a mathematician, the structure underlying the bullet hole problem is a phenomenon called survivorship bias. It arises again and again, in all kinds of contexts. And once you’re familiar with it, as Wald was, you’re primed to notice it wherever it’s hiding.
"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.
- The Misconception: You should focus on the successful if you wish to become successful.
- The Truth: When failure becomes invisible, the difference between failure and success may also become invisible.
The Economic Impact of Survivorship Bias
Survivorship bias leads to several major consequences in the decision-making process since it:
- Encourages overly optimistic thinking: Just focusing on the successful portion of a given scenario can lead you to believe in a distorted reality where things are simpler or more likely to turn out well than they actually are. You can end up taking needlessly big risks as a result of this, both personally and financially.
- Omits significant voices: By limiting its view to only the positive results in a situation, survivorship bias leaves out the vital voices of those who have struggled to succeed.
- Suggests causation from correlation: If you look at all of the “success stories” of a particular group, you might start to notice patterns (or correlations) that offer a false sense of causation. For example, if you look at a few of the most prosperous billionaires or successful businesses, you might start to believe that being a college dropout is the first step towards becoming a high-power CEO. This perspective ignores all of the people who gave up and didn't succeed.
Example of Survivorship Bias
Survivorship bias is a fallacy in reasoning that has been observed to be significant in various domains, such as:
How to Address Survivorship Bias?
The best way to identify and address the survivorship cognitive bias is to ask yourself what’s missing. When looking at a given data set, consider any other possible data points that were on the “same path” as the successful data points but might not be present in the final data.
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