The Use of Base Rate Information as a Function of Experienced Consistency

Philip Dunwoody, Adam Goodie and Robert Mahan

Theory and Decision, 2005, vol. 59, issue 4, 307-344

Abstract: Three experiments examine the effect of base rate consistency under direct experience. Base rate consistency was manipulated by blocking trials and setting base rate choice reinforcement to be either consistent or inconsistent across trial blocks. Experiment 1 shows that, contrary to the usual finding, participants use base rate information more than individuating information when it is consistent, but less when it is inconsistent. In Experiment 2, this effect was replicated, and transferred in verbal questions posed subsequently. Despite experience with consistent base rates increasing sensitivity to base rates in word problems, verbal responses were far from normative. In Experiment 3, participants’ use of base rates was once again moderated by its consistency, but this effect was itself moderated by the diagnosticity of base rate information. Participants were highly accurate in estimating experienced base rates. These studies demonstrate that base rate usage is complex and a function of how base rates are presented (experienced versus summary statistics) and response format (choice proportions versus probability estimates). Knowledge of base rates was insufficient for proper usage in verbal word problems. Although choice proportions showed a sophisticated sensitivity to experienced base rate information, participants seemed unable to demonstrate a similar sophistication when given typical word problems indicating that base rate neglect is a function of information representation and not an inherent processing bias. Copyright Springer 2005

Keywords: base rate neglect; decision making; learning; choice; direct experience; diagnosticity (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11238-005-0946-8

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