Informal Fallacy: Clustering Illusion Fallacy
The Clustering Illusion, also known as the Sharpshooter Fallacy, is a logical fallacy that occurs when differences in data are ignored, but similarities are overemphasized, leading to a false conclusion of causation rather than attributing results to chance. It is like cherry-picking data after the fact to suit their argument, leading to a distorted view of reality Another name for this fallacy could be the "Selective Outcome Bias," which captures the essence of highlighting selective successes while ignoring the broader context of random or unsuccessful outcomes. Examples: An entrepreneur who publicizes one successful venture amidst numerous failed ones, creating an illusion of a high success rate. Recognizing and avoiding the Clustering illusion is crucial for accurate data analysis and decision-making in economics and investing. An investor might notice a few successful trades in a row and conclude that their strategy is flawless, ignoring the trades that did not work out...