The mental shortcut of judging probability by how easily an example comes to mind — overweighting vivid, recent, or emotionally charged events.
Deeper Explanation
After a dramatic market crash, investors overestimate the probability of another crash because the memory is vivid and accessible. After a decade of bull markets, they underestimate crash risk because it seems remote. The availability heuristic leads to recency bias at scale — the most recent experience dominates risk assessment. The correction is base rate thinking: not "what do I remember happening?" but "what is the actual historical frequency of this event?" Kahneman's recommendation: slow down, use reference classes (how often has this actually happened in similar situations?), and treat vivid anecdotes as illustrations, not evidence.
Continue Learning
Go deeper into the Behavioural school — frameworks, case studies, and decision systems.