Conjunctive and disjunctive events bias

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We tend to have general bias to overestimate the probability of conjunctive events (events that must occur in conjunction wit one another) and the underestimate the probability of disjunctive events (events that occur independently).

When multiple events all need to occur, we overestimate the true likelihood of this happening. If only one of many events needs to occur, we underestimate the true likelihood of this event.

Planning fallacy

Overestimation of conjunctive events is related to overestimation of future productivity and the planning fallacy. Individuals, business and governments frequently fall victim to the conjunctive events bias. They underestimate the timing and budgets for projects that require multistage planning. We are too optimistic in our assessments of project’s costs and time frames.

In contrast, individuals tend to underestimate disjunctive events. This leads us to expect the worst. Probabilities are sometimes higher (when they are summed) than they appear to be when evaluated separately.

Adapted from

Bazerman, M.H. and Moore, D.A., 1994. Judgment in managerial decision making (p. 226). New York: Wiley.

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