Survivorship Bias (With Examples) | From A Business Professor

Description

You may have heard the phrase “they don’t make them like they used to.” This reflects the popular perception that goods such as electric appliances, cars, or other equipment produced in previous decades surpass contemporary goods in quality. However, this perception doesn’t take into account that only the sturdier items have survived into the present day. Other products that have broken down in the meantime are not visible to us. This leads us to the false impression that all goods produced in the past were built to last. The above perception is a typical example of Survivorship Bias. Actually, survivorship bias is noticeable in a wide range of fields, particularly in the business world. So, what is survivor bias? Are there some real-world examples? Why it matters and how to avoid it? In this video, I will discuss these questions with you.