Cover of Thinking, Fast and Slow by Daniel Kahneman - Business and Economics Book

From "Thinking, Fast and Slow"

Author: Daniel Kahneman
Publisher: Farrar, Straus and Giroux
Year: 2011
Category: null

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Chapter 4: Part Four: Choises
Key Insight 14 from this chapter

Denominator Neglect and Risk Communication

Key Insight

The way risks are presented profoundly affects their perception and subsequent decision-making, often due to a bias called denominator neglect. This phenomenon occurs when people assign disproportionately higher weight to low-probability events when they are described in terms of relative frequencies (e.g., '1 of 100,000 children') rather than as abstract probabilities (e.g., 'a 0.001% risk'). The frequency format evokes vivid, concrete images that System 1 readily processes.

For instance, describing a vaccine risk as 'one of 100,000 vaccinated children will be permanently disabled' is far more impactful than stating 'a 0.001% risk of permanent disability.' The former calls forth the image of an individual child, making the potential harm more salient and increasing its perceived severity. Similarly, a disease killing '1,286 people out of every 10,000' is judged more dangerous than one killing '24.14% of the population,' even if the latter is objectively a higher risk.

Denominator neglect affects even experienced professionals. Forensic psychologists, when presented with the risk of a violent patient in frequency format ('10 of every 100 patients'), were almost twice as likely to deny discharge compared to those given the same information as a '10% probability.' This illustrates how the vividness inherent in frequency formats can override objective statistical assessment, influencing critical decisions by enhancing the decision weight of the perceived threat and exploiting System 1's preference for concrete representations.

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