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This chapter reviews evidence showing that people are remarkably sensitive to the rarity of events when making inferences about them. Indeed, people are so attuned to event rarity that their implicit assumptions about rarity guide their thinking even in laboratory tasks where experimenters have implicitly assumed that rarity would not matter. Lack of awareness of this problem has led many experimenters to misinterpret people’s adaptive responses as irrational. Indeed, focusing on data that are rare leads people to behave in a qualitatively Bayesian manner. These points are illustrated using tasks that involve assessing the covariation between variables, evaluating hypotheses after passively receiving data, and actively searching for data to test hypotheses. Participants’ sensitivity to, and assumptions about, rarity have important implications for understanding lay inference.
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