Survivorship Bias

Survivorship Bias is the tendency of human beings to overestimate the likelihood of success, when undertaking a new and risky business venture.

This is likely to happen if you think about it, as other peoples (and businesses) successes are easy to spot publicly, whereas those who fail with a new business venture, are going to not be so visible to the public at large.

When a business is being successful, such as gaining sales, or expanding by taking over another business, they often publicise the fact.

Media outlets such as newspapers, local business publications, radio & the internet, are used to get the message out.

By letting the world know that the business has had a success, it acts as a form of advertising, and is good PR (Public Relations).

Winners  love winners, and promoting business success helps attract new successful clients.

This business publicity also reinforces the message that businesses can be successful, which will potentially encourage others to start a business, without appreciating the risks.

Therefore we are biased by the success stories of the business ventures that prospered.

Published by Craig Miles

Craig Miles