Which cognitive error is characterized by making decisions without properly considering statistical realities?

The base rate fallacy refers to the cognitive error that occurs when individuals disregard or undervalue statistical information (the base rates) in favor of specific information about a particular case. This often leads to flawed decision-making because people might focus on anecdotal evidence or vivid examples rather than taking into account the overall probabilities that are statistically relevant.

For instance, when evaluating the likelihood of an event based on a specific case without considering how common that case is in the larger population, individuals can come to believe something is more probable than it actually is. An example could be believing that a certain type of rare disease is more likely in a specific context because of a recent news story, even though the actual base rate of the disease in the general population is very low.

In contrast, the planning fallacy involves underestimating the time, costs, and risks of future actions and overestimating the benefits, leading to overly optimistic project timelines. The availability heuristic is a mental shortcut where people rely on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision, often causing them to misjudge probabilities based on how easily they can recall certain instances. The anchoring effect occurs when individuals rely too heavily on the first piece of information they encounter