TIP447: How to Build a Human Bias Defense System w/ Gary Mishuris
We Study Billionaires - The Investor’s Podcast Network
Base Rate Neglect Bias in Decision Making
Base rate neglect bias occurs when individuals ignore the experiences of others in similar situations and make assumptions based solely on their own beliefs. This bias is exemplified by the unrealistic expectation that one can achieve outcomes significantly different from the norm, akin to believing a fair coin will consistently flip tails at a rate higher than 50%. Recognizing and avoiding this bias involves considering the base rates and relying on both personal experience and empirical evidence rather than unfounded beliefs.
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