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Base rate fallacy

Description

The tendency to ignore base rate information (generic, statistical information) and focus on specific information (information only pertaining to a certain case).

Example 1:

A startup founder overestimates their chance of success by focusing on anecdotal stories of successful entrepreneurs, while ignoring the high base rate of startup failures.

Example 2:

When evaluating a startup investment, investors might be overly swayed by a charismatic founder's pitch (specific information) and ignore the high failure rate for startups in that sector (base rate information).

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