Focusing on successes while ignoring failures leads to false conclusions.
Wald's bomber analysis is the cleanest case, and mutual fund performance tables are the everyday one: closed funds vanish from the record, so the surviving average overstates the category.
In practice
- A street of eighteenth-century buildings suggests they built well then, and the ones built badly are not there to be counted.
- A management technique's success stories are collected from firms that survived, and the ones that did the same thing and failed are not available to be surveyed.
- Further reading
- Wikipedia
- Subject
- Science & Epistemology
- Essay
- The ways evidence misleads