AI engineering glossary · Probability
What is base rate fallacy?
Base rate fallacy (also called Base rate neglect): The mistake of judging how likely something is by looking only at specific evidence and neglecting how common it is overall. It makes people overrate the meaning of a positive test for a rare condition.
Base rate fallacy: an example
A 95%-accurate fraud alert on a category where 0.1% of transactions are fraud will still be wrong most of the time it fires.
Related terms
More Probability terms
- Bayes' theorem
- Bayesian probability
- Bernoulli distribution
- Binomial distribution
- Birthday problem
- Categorical distribution
- Central limit theorem
- Chain rule of probability
Where you learn it
Base rate fallacy is part of the AI Engineering Program, which teaches it with notes, a hands-on lab and an exam. The first lesson is free.