Imagine that you have received a positive result on a routine cancer screening test. Follow-up biopsies were inconclusive, and the decision to treat aggressively or monitor conservatively is yours. Consider the following information: 0.1% of the population has a terminal version of this form of cancer, 99% of those people will appear positive on the test you have been administered, and 5% of those without terminal cancer will still have a benign condition that tests positive. Given your test result, what is the probability that you have terminal cancer and should treat it aggressively? When judging risks and trying to predict the future, how should you decide? We need to better understand the structure of risks and how the human mind creates representations of risk and probability.
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