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.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 probability of their restaurant failing based on the history of similar businesses at that location. They believe that their hard work will make a difference, but they are not acknowledging the past failures of businesses at that location.

Claude and Marie Are Excited Because They Have Just Bought