Availability heuristic
Judging how common or likely something is by how easily examples come to mind. Dramatic, famous or recent cases are easy to recall, so they feel more typical than they are.
In plain English
Memory isn't a random sample. It keeps the vivid, the recent and the much-repeated, and drops the ordinary. So plane crashes feel more common than car crashes, and dropout billionaires feel like the typical founder. The fix is to count instead of recall: find a full list, or one that wasn't chosen for being interesting, and look at the base rate.
Uncle Gary explains
Kevin's company limited its startup programme to under-30s because the famous founders were young. In data on 2.7 million US founders, the ones behind the fastest-growing firms averaged 45.
Why it matters for your money
The stock that went up a hundredfold is easy to remember; the thousands that went nowhere aren't. Strategies built on memorable winners ignore them all.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.