Bias 3: Ratio Bias

As purchasing managers in a cosmetics firm, we can buy two kinds of skin-care products from our supplier:

Product 1:  Has a risk of 2.4% to trigger skin allergies

Product 2: Has caused skin allergies in 223 people among 9325

Which one do you buy (try not to make the calculation)?

The risk is slightly lower for Product 2 but most people prefer Product 1 as the impersonal presentation of the risk makes it less frightening. Generally speaking, presenting small ratios in terms of frequencies make them higher than when presented in percentages as we tend to neglect the denominator.

Thinking fast and slow, D.Kahneman