Tuesday, 21 May 2019 | 04:01 WIB

Deconstructing Human Irrationality through Behavioral Economics

Professor Richard H. Thaler (wikimedia)

Error Thinking # 5: Survivor Bias

This bias occurs when we draw conclusions based on invalid data. Why not valid, because we often read only the survival or successful survival stories, while stories of failures are are rarely reported.

Example: Steve Jobs, Bill Gates and Mark Zuckerberg are all drop out students. However, they are successful. Some people would then say, do not be afraid to drop out, because you can succeed as well as them.

Such a statement is an example of a mind trapped by a survivor bias.