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Group decisions

Base-rate neglect

A vivid story outweighs the statistics on how similar cases usually turn out.

A vivid story or a convincing detail sticks in the mind far more easily than dry statistics. Yet the statistics – how often something usually works out – are the best starting point for any estimate. Only then should you adjust for the specific circumstances.

Example · made up for illustration
A neighbour excitedly tells you his friend opened a café and earned back the investment within a year: “I'm going to try it too.” He doesn't check how many new cafés and restaurants close in their first few years. The success story is true – but nobody tells the failed ones.

How to spot it

  • The decision rests on one striking story, not on figures about similar cases.
  • Everyone talks about how special our situation is, and nobody asks how things usually turn out.
  • Documents with the statistics exist, but nobody has opened them.
  • A rare event seems likely because it was in the news recently.

How to check and what to do

  • First find the base rate: how many similar cases out of 10 or 100 usually succeed.
  • Only then ask how your case demonstrably differs and how much that changes the estimate.
  • Look for the failures too, not just the stories people talk about.
  • In meetings, start with the documents and numbers, not with impressions.

Tip: When a disease is rare, most positive results even from a very accurate test can be false. That's why doctors confirm a positive result with further tests.

The card fits on one A4 page – for the classroom, a noticeboard, or parents and grandparents.

Practise it

Lessons and articles where you hunt for this trick with the red pencil.

More tricks from the chapter Group decisions.

All tricks in the atlas →

Base-rate neglect: how to spot and check it | ThinkCritical.eu