What it is
Category size bias is a mental error made when we assume outcomes are more likely when they belong to a larger category or sample group. Whether or not the bias has a psychological basis however, is still up for discussion.
Why it happens
We are erroneously associating the likelihood of a given event to the likelihood of its parent category. One might think rolling a “T” on a 26-sided die is more likely than rolling an “A” because there are more consonants than vowels.
Example 1 – IT security threat
Security risks that coincide with more preventive measures are believed to be more likely than those risks that coincide with a smaller group of measures, despite the risk and number of measures required not necessarily being predictive of each other.
Example 2 – Casino games
Casino goers may be susceptible to the category size bias. Although all slot machines in a casino may have equal probabilities, an individual may inaccurately presume the slot machines within a larger section of machines to have better odds than the ones in isolation.
How to avoid it
Reviewing the logic and causal reasoning of an assumption can mitigate the category size bias. Instead of leaning heavily on intuitive probabilities, acknowledge that such intuitions may be fallible and consider whether we may be inappropriately giving weight to category size in probability judgments.