How to Choose –  SHOW NOTES

Season 3, Episode 6 : Nobody wants to be average! (Base Rate Neglect)

Tessa Mudge & Ken Smith


How do you approach decisions or judgements that rest on the likelihood of something being true or the likelihood of something happening? Most of us find it difficult to take into account a critical factor known as the base rate.


When it comes to making judgements and decisions, humans are hardwired to do a couple of things that are often – but not always – helpful.

One thing that’s true of all humans is that we love patterns. Our brain will try to match things we see and hear to patterns or templates that we’ve accepted as true. We see a person or hear a description of them (such as the fictional Tom who we describe in this episode) and we subconsciously form some assumptions about that person. Those subconscious assumptions can be exposed when we’re asked to make a prediction about that person – and ‘Presto’, Tom becomes a librarian – or a tradesman.

But when we’re focused on a single individual or a particular situation, we’re ignoring the broader population. Base rate neglect is that tendency to ignore the statistical likelihood of something being true.

We also have a strong tendency to see ourselves as exceptional. For some reason we think that statistics don’t apply to us. Sure, most registered actors don’t find work – and those that do earn generally don’t earn enough to make a living. But somehow we all think things will be different for us. This is base rate neglect.


If you haven’t already got a copy, do yourself a favour and buy ‘The Scout Mindset’ by Julia Galef. Galef illustrates base rate neglect and a related thinking problem that we’ll address next episode called ‘optimism bias’ really well in that book.

Want to ponder false positives and false negatives a bit more. Check out (I can’t guarantee that it will be fun, but it explains it pretty well!)

Here’s a nice little explanation of correlation vs causation if you want a refresher –


How do we reduce the impact of base rate neglect on our judgements and decisions?


Yes, pause. That’s essential for mitigating the impacts of all biases. Quick thinking (often called system 1 thinking) is useful when you see a bear in the woods, but less useful when you’re deciding whether to invest your hard-earned savings into your friends’ new start-up.

And while you’re pausing, ask – ‘What do the statistics have to teach me here? What is the likelihood that… (fill in the blank – e.g. ‘…Tom is a librarian?’ / ‘…John and Louise’s cafe will be successful?’ / ‘…I will win the lottery?’). We can all be fortunate. We can all become above average at some things – perhaps even exceptional and highly successful. But statistics matter and at some point, the bell curve tolls for us all!

If you’ve enjoyed this episode, please take two minutes to rate us on your podcast player and tell a friend about the show.


Next episode we’ll be talking about optimism bias – one we’re both rather susceptible to!

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