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Always consider the base rate when making decisions from "summary" of The Art of Thinking Clearly: Better Thinking, Better Decisions by Rolf Dobelli
When faced with a decision, it is crucial to always consider the base rate. The base rate is the basic probability of an event happening in a general population. It provides a reference point from which to evaluate the likelihood of an outcome. Ignoring the base rate can lead to errors in judgment and decision-making. For example, let's say you meet someone who is dressed in a suit and tie, carrying a briefcase. Based on these visual cues, you might assume that this person is a lawyer. However, if you fail to consider the base rate – the fact that only a small percentage of people in the general population are lawyers – you might be making a biased judgment. In another scenario, let's consider a medical diagnosis. If a doctor tells you that you have a rare disease with only a 1% incidence rate in the population, it is important to consider this base rate when evaluating the accuracy of the diagnosis. Without taking into account the base rate, you might overestimate the likelihood of having the disease, leading to unnecessary anxiety and costly medical tests. By incorporating the base rate into your decision-making process, you can avoid falling prey to cognitive biases such as the availability heuristic or representativeness heuristic. These biases can distort your judgment by focusing on specific details or similarities without considering the broader context provided by the base rate.- Always consider the base rate when making decisions to ensure that you are taking into account the true probability of an event occurring. By doing so, you can make more informed and rational choices that are grounded in a realistic assessment of the situation at hand.
