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Decision Frameworks · Card 4
Base Rate Thinking
Before trusting one loud, specific story, ask what usually happens in situations like this — the quiet average is often more honest than the exciting exception.
My Specific Story
Loud, memorable, one case
What Usually Happens
Quiet, boring, the average
In Practice
One friend's story about tripling money on a hot tip is loud and memorable. The base rate — that most such tips don't repeat — is quiet, easy to ignore, and far more reliable.
Generic Example
One viral story of someone winning big at a casino is memorable. The base rate — that most gamblers lose over time — is the boring truth that actually applies to you.
Before I trust this specific story, what does the average outcome in situations like this actually look like?
Shows up in Probabilistic Thinking