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Hardcover Book Details
  • 10/2021
  • 9781626348806 1626348804
  • 296 pages
  • $25.95
Greenleaf Book Group
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Fooled by the Winners: How Survivor Bias Deceives Us
Fooled by the Winners will change the way you think about the stock market, health care, global warming, diets, lotteries, restaurants, and your siblings. It will reshape your perspective of the past and give you a clearer view of the future. Fooled by the Winners is a book about survivor bias, the cognitive error of focusing on the winners, the successes, and the living. But in many instances, we can learn more from those who have lost, failed, or died. Survivor bias is found in a wide range of fields, lurking quietly beneath the surface, patiently waiting to deceive us. Previous studies of survivor bias have been inaccessible to most, housed in formula-laden statistical journals. But you won’t find any math or technical jargon here. David Lockwood, a former member of the faculty of the Graduate School of Business at Stanford University, applies the concept of survivor bias to specific, real-world examples―minus the equations. After reading this book, you will understand how survivor bias is often used to deceive us. You will learn how to stop paying for financial services that promise more than they deliver, for health care that doesn’t make us healthier, for diets that don’t make us slimmer, and for advice books that don’t offer good advice. You will also come away with a different view of our past, including our perilous evolutionary journey and how history has often been written by the winners. You will come understand how we are fooled by the winners in warfare, such as the deployment of nuclear weapons and the most famous example of survivor bias―the missing Allied bombers of WWII. You will see how survivor bias clouds of our view of the past and prevents us from gaining a clear view of our future. Through compelling, real-life examples, this book demonstrates the deceptive influence of survivor bias in our daily lives and on our thinking. It shows how to correct for survivor bias, so you are never again fooled by the winners.
Reviews
Lockwood explores one of the most common cognitive biases, survivor bias, which he describes as the tendency to “Concentrat[e] on the people or things that made it past some selection process and overlooking those that did not.” He posits that we need to understand both the survivors and the casualties in situations to develop a “clear view of the future” and to ensure our survival as a species. “[T]o be a survivor, we must not be fooled by the winners,” he argues. To illustrate this, he delves into varied teaching examples, including the hedge funds that succeed instead of failing–to assess potential risk, you should consider all an investment firm’s hedges, not just the profitable ones–as well as military bombers that don’t get shot down versus those that crash, and the evolutionary history of modern humanity itself, in contrast to earlier species who didn’t survive.

Lockwood analyzes survivor bias from two key perspectives, that of observers outside of the set of survivors and that of observers who are part of the survivor group, concluding that both perspectives are misleading in different ways. External observers can fall prey to mistakes such as overestimating the chances of a mutual fund’s success or believing in outside causes like ESP, while members of a survivor group are likely to underestimate the potential for future catastrophes, like nuclear war or climate change, simply because they have not happened yet. Lockwood cautions that observing these global risks clearly is necessary in order to effectively counter them.

Lockwood’s clear and brisk style breaks down complex ideas, and his past experience as a lecturer at Stanford, as well as on Wall Street and in Silicon Valley, serves him well in making his case.Curious readers eager for a better grasp on complex mathematical principles or who enjoy big ideas will find this an accessible explanation of survivor bias and how it can cloud our thinking.

Takeaway: Readers looking for a big idea or to reduce their own cognitive bias will find this exploration of survivor bias illuminating.

Great for fans of: Nassim Nicholas Taleb’s Black Swan, Leonard Mlodinow’s The Drunkard’s Walk.

Production grades
Cover: A
Design and typography: A
Illustrations: B-
Editing: A
Marketing copy: B

Formats
Hardcover Book Details
  • 10/2021
  • 9781626348806 1626348804
  • 296 pages
  • $25.95

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