The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty

CHAPTER 35

The Statistical Research Group of World War II

In the spring of 1942, a young economist and statistician teaching at Stanford University received a telegram requesting his assistance in the war effort. He had been asked to come to New York to help run a statistical research group at Columbia University devoted to military problems. He accepted. Allen Wallis had a bachelor’s degree in psychology from the University of Minnesota and had done graduate work in economics at the University of Chicago, where he developed lifelong relationships with Milton Friedman and George Stigler, both future Nobel Laureates in economics. Wallis himself, perhaps due to the arrival of the telegram that fateful day, never finished his own PhD. He did, however, go on to become dean of the University of Chicago Graduate School of Business, greatly elevating its stature, then chancellor of the University of Rochester, and finally undersecretary of state for economic affairs under President Ronald Reagan.

In a 1980 article in the Journal of the American Statistical Association, Wallis reminisced about his wartime experiences at the Statistical Research Group, or SRG, as it was known.¹

“Exploring the history of one’s professional field is often a mark of maturity. Reminiscing about it is usually a mark of senility,” Wallis wrote. However, he was still far from senile when I last met him in 1998, a few months before his death.

There were a total of 18 researchers in the group, comprised of future ...