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The base rate fallacy, also called base rate neglect [2] or base rate bias, is a type of fallacy in which people tend to ignore the base rate (e.g., ...
For example, if the control group, using no treatment at all, had their own base rate of 1/20 recoveries within 1 day and a treatment had a 1/100 base rate of recovery within 1 day, we see that the treatment actively decreases the recovery. The base rate is an important concept in statistical inference, particularly in Bayesian statistics. [2]
A base rate is a phenomenon's basic rate of incidence. The base rate fallacy describes how people do not take the base rate of an event into account when solving probability problems. [12] This was explicitly tested by Dawes, Mirels, Gold and Donahue (1993) who had people judge both the base rate of people who had a particular personality trait ...
Base rate fallacy or base rate neglect, the tendency to ignore general information and focus on information only pertaining to the specific case, even when the general information is more important. [47] Compassion fade, the tendency to behave more compassionately towards a small number of identifiable victims than to a large number of ...
There are many related ways in which people violate the normative rules of decision making with regard to probability including the hindsight bias, the neglect of prior base rates effect, and the gambler's fallacy. However, this bias is different, in that, rather than incorrectly using probability, the actor disregards it.
A quarter-percentage-point reduction would bring the Fed's policy rate to the 4.25%-4.50% range, a full percentage point below where it was in September when the central bank began its easing cycle.
Thus, people can overestimate the likelihood that something has a very rare property, or underestimate the likelihood of a very common property. This is called the base rate fallacy. Representativeness explains this and several other ways in which human judgments break the laws of probability. [14]
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