Questions 4-5 deal with the following information: GloboSnax has an overall 10% success rate when introducing new products. (Suppose success here means a product achieves a certain target market share within 2 years of its introduction.) Before roll-out, a secret forecasting committee assesses each new product, and calls it a “winner” or “loser.” In the past, the committee has done reasonably well in distinguishing between successful and unsuccessful products: 90% of products that went on to succeed were correctly called “winners” by the committee. 70% of products that went on to fail were correctly called “losers” by the
Questions 4-5 deal with the following information:
GloboSnax has an overall 10% success rate when introducing new products. (Suppose success here means a product achieves a certain target market share within 2 years of its introduction.)
Before roll-out, a secret forecasting committee assesses each new product, and calls it a “winner” or “loser.” In the past, the committee has done reasonably well in distinguishing between successful and unsuccessful products:
- 90% of products that went on to succeed were correctly called “winners” by the committee.
- 70% of products that went on to fail were correctly called “losers” by the committee.
A new product, CocoChips is evaluated and labeled a “winner” by the committee.
4. Based on the information available, calculate the
5. What would be a plausible intuitive probability judgment for the quantity in question 4 from someone exhibiting base-rate neglect?
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