Cognitive biases are mental shortcuts that can lead to errors in judgment. Two common biases are the base rate fallacy and the conjunction fallacy.
Base Rate Fallacy
The base rate fallacy occurs when people overestimate the likelihood of an event based on specific information, while ignoring the overall probability of the event. This can lead to faulty decision-making and inaccurate judgments.
Example: Imagine you’re told that a rare disease affects 1 in 1,000 people. You’re also told that a new diagnostic test is 99% accurate. If you test positive for the disease, what is the probability that you actually have it?
Many people would intuitively believe that the probability is very high (around 99%), but this is a fallacy. The actual probability is much lower, due to the low base rate of the disease.
How to avoid the base rate fallacy:
- Consider the overall probability: Think about the likelihood of an event occurring in general, rather than focusing solely on specific information.
- Seek objective data: Gather information from multiple sources to get a more accurate picture of the situation.
- Be skeptical of anecdotes: Avoid drawing conclusions based on personal stories or anecdotes.
Conjunction Fallacy
The conjunction fallacy occurs when people believe that the conjunction of two events is more likely than one of the events alone. This can lead to overestimating the probability of complex events.