Ψ Base Rate Fallacy
The Base Rate Fallacy is our tendency to ignore information that describes most people and to be influenced by the distinctive features of the case being studied.
The Base Rate Fallacy is the belief that probability rates are false. When presented with statistics about the population as a whole, people tend to ignore them & think about themselves as completely different entities. For example someone has the symptoms of a disease which takes two forms, both fatal, requiring two different medicines. Only one medicine can be taken & medicine A does not work for form B of the disease & medicine B does not work for form A of the disease. Form A of the disease occurs 10% of the time in the population whilst form B occurs 90% of the time. After taking an 80% reliable A/B test it says that this person has form A of the disease. Therefore this person is likely to take the treatment for form A of the disease despite a 20% chance that he could have form B & only 10% of people in the population have form A. This is because people are not concerned with statistics, they are concerned with themselves.
People can learn base rate probabilities quicker through experience where-by a penalty is incurred each time they act in a certain way. For example if people were told that a slot machine gave out a lot of money each time it was played on, they would probably think it was a lie & ignore the base rate. However if they tried it & won some money they are more likely to believe it & carry on playing. Therefore it can be wrong to ignore base rates.
Robert C. Gates