Base Rate Neglect
We ignore general statistics when making specific predictions.
Explanation
When evaluating a specific situation, we tend to focus on the unique details and ignore the broader statistical reality (base rate). This leads to overconfidence in predictions and poor probability estimates. The base rate tells you what usually happens in similar situations, which is often the best predictor of what will happen in this specific case.
Real-World Example
90% of restaurants fail within 5 years (base rate), but every new restaurant owner thinks theirs will succeed because of their unique concept, location, or passion. 85% of startups fail, but founders focus on their specific advantages. Most diets fail long-term, but dieters focus on their personal motivation.
How to Apply
Before making predictions about specific situations, research the base rate: What usually happens in similar cases? Start with that probability, then adjust based on truly unique factors. Don't ignore statistics just because you have inside information—most 'inside information' isn't as unique as it seems.