### Surviving Statistics

##### How the survivor bias distorts reality

When I purchased my latest vehicle, I was astonished to get the license plate 6NWL485. What are the chances that I would get that particular configuration? Before I received it, the odds would have been one in 175,760,000. (The total number of letters to the power of the number of letters on the plate times the total number of digits to the power of the number of digits on the plate: 26^{3} x 10^{4}). After the fact, however, the probability is one.

This is what Pomona College economist Gary Smith calls the “survivor bias,” which he highlights as one of many statistically related cognitive biases in his deeply insightful book *Standard Deviations* (Overlook, 2014). Smith illustrates the effect with a playing card hand of three of clubs, eights of clubs, eight of diamonds, queen of hearts and ace of spades. The odds of that particular configuration are about three million to one, but Smith says, “After I look at the cards, the probability of having these five cards is 1, not 1 in 3 million.” (continue reading…)