High Quality Content by WIKIPEDIA articles! The base rate fallacy, also called base rate neglect, is an error that occurs when the conditional probability of some hypothesis H given some evidence E is assessed without taking sufficient account of the "base rate" or "prior probability" of E. In a city of 1 million inhabitants there are 100 known terrorists and 999,900 non-terrorists. The base rate probability of one random inhabitant of the city being a terrorist is thus 0.0001 and the base rate probability of a random inhabitant being a non-terrorist is 0.9999. In an attempt to catch the terrorists, the city installs a surveillance camera with automatic facial recognition software. If one of the known terrorists is seen by the camera, the system has a 99% probability of detecting the terrorist and ringing an alarm bell. If the camera sees a non-terrorist, it will only incorrectly trigger the alarm 1% of the time. So the failure rate of the camera is always 1%.

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