Calculate a threshold from error cost
Use simple expected-cost reasoning to decide when AI outputs should go to human review.
Decide which fraud-score band should go to human review when wrongful block cost is $40, missed fraud cost is $400, and review costs $6. Expected-cost thresholding for HITL review Using a round confidence number like 80% ignores whether the costly error is blocking a good customer or missing fraud. Name the errors False positive: block a legitimate transaction. False negative: allow fraud. Review: pay human time to inspect the case. Without error names, confidence becomes abstract and the threshold cannot be defended. Estimate relative cost Wrongful block is about $40. Missed fraud is about $400. Human review is about $6.…
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