Thinking in probabilities
Few real decisions are certain. Thinking in likelihoods rather than yes or no helps you weigh options honestly, update with new evidence and avoid overconfidence.
Key ideas
- Express beliefs as rough likelihoods, not certainties.
- Start from how often something usually happens.
- Update your estimate as new evidence arrives.
Step by step
- 1
State what you are estimating and your first guess as a percentage.
- 2
Check the base rate: how often does this usually happen?
- 3
Adjust for the specific evidence in this case.
- 4
Revisit the estimate when new information appears.
Example
Asked whether a project will finish on time, a manager says 'about 60 per cent', explains the main risk and updates to 80 per cent once the supplier confirms delivery.
Your drill
For three decisions this week, write your likelihood estimate and the base rate you started from, then check the outcome later.
Common mistakes
- Ignoring how common something usually is.
- Refusing to change an estimate when evidence changes.
Check yourself
What is a base rate?
Show the answer
How often something usually happens in similar situations, used as the starting point for an estimate.
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