Imagine that you are a business owner trying to decide whether to expand your product line or not. You have two options:

Option A: Expand your product line and launch a new product that has the potential to become a bestseller but is also risky and expensive to produce.

Option B: Stick with your current product line and continue to focus on your core products that have a proven track record of success.

Now, imagine that you are presented with two scenarios:

Scenario 1: You expand your product line and the new product becomes a bestseller, generating significant revenue for your business.

Scenario 2: You stick with your current product line and continue to focus on your core products, maintaining your current level of success.

If you are susceptible to the conjunction fallacy, you might think that Scenario 1 is more likely to occur than Scenario 2. This is because Scenario 1 involves two events occurring together (expanding your product line and launching a new bestseller product), whereas Scenario 2 involves only one event (sticking with your current product line and maintaining your current level of success).

However, statistically, it is always more likely that Scenario 2 is true, as it represents a larger group than Scenario 1. Even though expanding your product line and launching a new product has the potential to become a bestseller, it is also risky and expensive.

By falling prey to the conjunction fallacy, you might be tempted to choose Option A because it has the potential to become a bestseller, even though statistically, sticking with your current product line and maintaining your current level of success is a more likely scenario. This bias can lead to flawed judgments about the likelihood of success and can lead to suboptimal business decisions.

Post 2/N: Conjunction Fallacy
Hello everyone! 👋 Thanks for reading through today's post on Conjunction Fallacy. Conjunction fallacy is a cognitive bias in which people tend to assume that the co-occurrence of two events is more likely than the occurrence of just one of the events, even when the latter is more probable. In other words, people tend to believe that the conjunction of two events is more likely than either event alone, despite the fact that the probability of a conjunction is always lower than the probability of one of its conjuncts.

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