Base rate fallacy is the tendency to ignore base rates (or background information) when making judgments about the probability of something happening. For example if I told you that I flipped a coin 10 times and it came up heads each time you might be inclined to believe that the probability of the next flip being heads is 100%. However the underlying base rate (or prior probability) of a coin flip is 50% so regardless of the fact that the last 10 flips were heads the probability of the next flip being heads is still only 50%.
Base rates are important pieces of information that can help us make more accurate judgments but we often let them fall by the wayside in favor of other information that may not be as relevant. This can lead to some bad decision-making as we saw in the example above.
There are a few reasons why we might let base rates fall by the wayside. One reason is that we tend to focus on the most recent information which is known as the recency effect. The recency effect can lead us to give too much weight to the most recent information and not enough weight to the base rate.
Another reason we might ignore base rates is that we might not have all the information. For example if I told you that I had flipped a coin 10 times and it came up heads each time but I didn’t tell you what the base rate was you would have to make a judgment about what the base rate was before you could accurately judge the probability of the next flip being heads. This can be a difficult task and we often resort to using heuristics or mental shortcuts to make these judgments.
Heuristics can lead us to make some errors in judgment but they can also help us make judgments quickly and efficiently. The trade-off is that we might not always make the most accurate judgments when we use heuristics.
One heuristic that we often use is the Availability heuristic. The Availability heuristic dictates that we judge the probability of something happening by how easy it is to think of examples of it happening. So if I asked you to judge the probability of dying in a car accident you might think of all the times you’ve heard of people dying in car accidents and judge the probability to be quite high. However you might not think of all the times you’ve driven without dying in a car accident which would lead you to underestimate the probability.
The Availability heuristic can lead us to make some errors in judgment but it can also be a useful tool. The key is to be aware of the bias and to try to adjust for it when making judgments.
The base rate fallacy is a cognitive bias that can lead us to make some poor decisions. However there are ways to avoid the fallacy such as by being aware of the bias and using heuristics in a thoughtful way. With a little practice we can start to make better judgments about the world around us.
What is base rate fallacy?
Base rate fallacy is when people judge the likelihood of an event by its base rate without taking into account other relevant information.
What is an example of base rate fallacy?
If the base rate of cancer is 1% and the base rate of people who smoke is 15% a person might falsely conclude that the likelihood of a smoker developing cancer is 15%.
Why is base rate fallacy a problem?
Base rate fallacy can lead to false conclusions and can cause people to make bad decisions.
What is another name for base rate fallacy?
Base rate neglect.
What is the base rate?
The base rate is the percentage of people in a population who have a certain characteristic.
How can I avoid base rate fallacy?
Be aware of the base rate and take into account other relevant information when making decisions.
What is an example of when base rate fallacy might occur?
If the base rate of a disease is 1% and the base rate of people who have a certain symptom is 10% a person might falsely conclude that the likelihood of a person with the symptom having the disease is 10%.
What can happen if I fall victim to base rate fallacy?
I might make a bad decision or come to a false conclusion.
What is base rate fallacy also known as?
Base rate neglect.
What does base rate fallacy refer to?
Base rate fallacy is when people judge the likelihood of an event by its base rate without taking into account other relevant information.
What is one way to avoid falling into base rate fallacy?
Be sure to take into account other relevant information in addition to the base rate.
What can happen as a result of base rate fallacy?
Poor decisions or false conclusions can be drawn.
What is the definition of base rate?
The base rate is the percentage of people in a population who have a certain characteristic.
What do you call it when people only consider the base rate when making a decision?
Base rate fallacy.
What is an example of base rate fallacy?
If the base rate of a disease is 1% and the base rate of people who have a certain symptom is 10% a person might falsely conclude that the likelihood of a person with the symptom having the disease is 10%.
