Building on theorizing about contingency inferences, the present research deals with the impact of product category prevalence on consumer choice. We argue that a category's prevalence in the choice set can signal high quality, but the validity depends on the aggregate quality of the choice set. With ever more low‐quality products in the set, high prevalence should increasingly signal poor rather than high quality. When choosing from a poor‐quality set, choices should thus favor products from the rare category. In four experiments, we show that poor‐quality sets increase the proportion of consumers choosing products from a rare category. Furthermore, we show that these effects increase when base rates of a category and quality become more extreme. Finally, Experiment 4 shows that contingency inferences partly mediate the effect of set quality on choice. The results extend previous research on contingency inferences, indicating the adaptive use of base‐rate information in consumer decision making. Copyright © 2017 John Wiley & Sons, Ltd.