Concept
The outside view
The outside view starts a forecast from the base rate: how often cases of this class turn out one way or the other. Superforecasters anchor on it before adjusting for the particulars of the case, and adjust less than instinct wants.
The inside view builds a story from the details of this case, this company, this person, and stories are persuasive and usually optimistic. The outside view asks what class the case belongs to and how that class has actually gone: how many startups at this stage survive five years, how many renovations come in on budget, how many people who took a role for the title were happy in it. Kahneman calls the base rate the most neglected number in decision-making. Tetlock's forecasters used it first, then let the inside view move them a little. The order matters: base rate first, story second.
A real-life example
A baker deciding on a second branch has a strong inside view: her first shop is full every morning. The outside view, four owners with second branches of whom two closed within two years, lowers her forecast and changes where she looks for a site.
How to use it
- 1Before the story of this case, name the class it belongs to.
- 2Find how that class usually turns out, then adjust from there, less than you want to.