Index

Cognitive Biases

Base Rate Neglect

The tendency to ignore general prevalence data when evaluating a specific case.

Base rate neglect leads to poor forecasts by ignoring broad statistical priors in favor of narrative details.

Core question

What do the base rates say before we add the case-specific story?

Example

A founder assumes her startup will be a breakout based on passion and product quality, while ignoring base rates for survival in the category.

How to apply

  1. 1.Start every forecast with relevant base rates.
  2. 2.Adjust up or down based on case-specific evidence quality.
  3. 3.Use probability ranges, not single-point certainty.
  4. 4.Track forecast accuracy and calibrate over time.

Pitfalls

  • ·Using irrelevant or outdated base rates.
  • ·Pretending unique cases have no common statistical structure.
  • ·Failing to update probabilities when evidence changes.

Questions

How is base rate neglect different from optimism?

Optimism is emotional expectancy; base rate neglect is a statistical error from skipping prevalence data.

What is a base rate neglect example in hiring?

Overvaluing one impressive interview while ignoring historical conversion and retention rates for similar profiles.

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