This is a Lexicon entry: the mechanism, when it shows up, and the countermeasure. The full correction, with real-world cases and the audit prompt, hasn't been written yet.
When it shows up
Insurance decisions (treating a 95% coverage as if it were 100%). Investment portfolio construction (ignoring tail risks because the "safe" portion feels guaranteed). Medical treatment choices where patients treat high-probability outcomes as certainties and ignore residual risk.
Failure mode
Systematically underweighting residual risk. Building plans that assume high-probability outcomes are guaranteed. When multiple sequential probabilities are involved, each "likely" step gets rounded to "certain" and the cumulative uncertainty disappears from the calculation.
Countermeasure
Multiply sequential probabilities explicitly. A plan with three 90% likely steps has only a 73% chance of full success. Ask: "What happens if this probable outcome doesn't occur?" Apply CL-2 (Base Rate Check).
Related concepts
Also connected in the mapOptimism Bias·Zero Risk Bias
Origin
Discovered by, 1979Daniel KahnemanPsychology · Nobel laureate · 1934–2024Proved judgement runs on fast, biased heuristics - the foundation the whole field stands on.See in Origins →
Discovered byAmos TverskyCognitive psychology · 1937–1996Kahneman's co-author; formalised how people misjudge probability and risk.See in Origins →Also revealed
Entry #78 of 631 in The Lexicon · see the full Lexicon