What Is The Conjunction Fallacy In Behavioral Economics?

The conjunction fallacy is a phenomenon in which people have a tendency to believe that the probability of two events occurring together is greater than the probability of either event occurring alone. This can happen when people focus on the relationship between two events, rather than on the individual probabilities of each event, and may lead them to make inaccurate or inappropriate judgments. For example, if you are asked to estimate the likelihood of a person having a particular disease based on their symptoms, you may overestimate the likelihood if you focus on the relationship between the symptoms, rather than on the individual probabilities of each symptom. The conjunction fallacy can lead to errors in judgment and decision-making, as it can cause people to overestimate the likelihood of certain events occurring together, and to be unprepared for the consequences. To avoid the conjunction fallacy, it is important to consider the individual probabilities of events, rather than focusing on their relationship, and to carefully evaluate the likelihood of each event before making a decision.

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