Signal Detection Theory
Separating how well you can tell signal from noise from where you set your threshold; every alarm system, screening test and gut feeling trades misses against false alarms, and the threshold is a choice.
An everyday example
A fraud filter tuned to catch everything blocks half your customers; tuned to annoy no one, it misses the fraud.
What it can cost you
Confusing sensitivity with bias; being sold a 'detector' whose accuracy is really a threshold set to please.
Warning signs
- I was given one accuracy number.
- The threshold was set by someone else.
One thing to do
Ask for both error rates — misses and false alarms — and decide which you can afford; never accept one number.
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