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Unlikely Optimism: The Conjunctive Events Bias

# Conjunctive events

• Broader categories are always more probable than their subsets. It's more likely someone has a pet than they have a cat. It's more likely someone likes coffee than they like cappuccinos. The extension rule in probability theory thus states that if B is a subset of A, B cannot be more probable than A.
• Likewise, the probability of A and B cannot be higher than the probability of A or B. It is more probable that Linda is a bank teller than that she is a bank teller and active in the feminist movement.

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## Unlikely Optimism: The Conjunctive Events Bias

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Key Ideas

### The conjunctive events bias

We often overestimate the likelihood of events that must happen in conjunction with one another.

We are optimistic in our estimation of the cost and schedule and surprised when something inevitably goes wrong.

### Conjunctive events

• Broader categories are always more probable than their subsets. It's more likely someone has a pet than they have a cat. It's more likely someone likes coffee than they like cappuccinos. The extension rule in probability theory thus states that if B is a subset of A, B cannot be more probable than A.
• Likewise, the probability of A and B cannot be higher than the probability of A or B. It is more probable that Linda is a bank teller than that she is a bank teller and active in the feminist movement.

### The best plans often fail

A plan is like a system. A change in one component of a system will likely impact the functionality of other parts of the system.

The more steps involved in a plan, the higher the chance that something will go wrong and cause delays and setbacks. For this reason, home remodeling and new product ventures seldom finish on time.

Just because we know and understand the concept of conjunctive events bias, we are not automatically immune to it.

When we are planning, it is useful to run through our assumptions with this bias in mind. We should be more pessimistic about our plans and consider the worst-case scenario.

### Dwight D. Eisenhower

“Plans are useless, but planning is indispensable.”

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