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. Their message can be highlighted by demonstrating such successes by visual props such as the medals they won, or images of their encounters with other notably famous people. 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.
As the title and caption both suggest, a major problem with these speeches is survivorship bias. Survivorship bias refers to an issue in statistical analysis where a significant portion of potential cases aren't available to be counted, and therefore aren't included in the statistics, which creates a data set which is biased toward the cases that are counted. In this case, the people who are invited to and willing to give such speeches are overwhelmingly people who achieved success. People who are unsuccessful tend not to be highlighted or publicized, even if they followed the same path and made the same efforts as those who became successful. This is especially important because achieving success usually involves taking risks. If those risks pay off and result in success, a person will often be lauded as an example of achievement, but if the risk doesn't pay off, they'll often be ignored. This can result in a skewed view of how certain risks are to result in positive outcomes.
To parody this concept, the comic shows Hairy encouraging people to "never stop buying lottery tickets", and surrounded by bags of money to 'flex' their (eventual) financial success, This is an terribly unwise investment plan, because the chances of winning large jackpots are mathematically very low, even if a person buys huge numbers of tickets. With very few exceptions, people who play the lottery lose far more money than they win. But, because of the existence very large jackpots, a few people will win enough money to become genuinely wealthy. If our only exposure to lottery players is someone who won a major jackpot, it could give a false impression that continually buying tickets is a good strategy, when in reality, the odds are astronomical against making money that way. In the same way, talks from people who took risks and became successful can give us a false impression about the likelihood of success in any other field of endeavor.
The title text continues the humor by taking two common aspects of inspirational speeches. One is the claim that "you can't argue with success", suggesting that advice from successful people must inherently be good. The other is that "if you stick with it, you can [do] anything". Randall plays those two off one another, since one is a claim of what you can't do, and the other insists that there's nothing you can't do.
- [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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