Claude and Marie are excited because they have just bought a restaurant from the previous owners. The two partners know that the last seven restaurants that have been operated at that location have gone bankrupt within a year of their openings, but Claude and Marie are certain their restaurant will be successful because they plan on working hard to be a success. In this case, the two new business partners are
A) showing belief perseverance.
B) showing evidence of the gambler's fallacy.
C) showing the confirmation bias.
D) apparently ignoring base rates.

Question

Quizplus · Accepted Answer

Claude and Marie are ignoring the base rates, which is the historical data that shows the likelihood of businesses succeeding at that location. They are overly optimistic and not taking into consideration the past failures of other businesses at that location.

Claude and Marie Are Excited Because They Have Just Bought