The Base Rate Fallacy Reconsidered: Normative, Descriptive and Methodological Challenges

Abstract

We have been oversold on the base rate fallacy in probabilistic judgment from an empirical, normative, and methodological standpoint. First, contrary to the conventional wisdom, a thorough examination of the literature reveals that base rates are almost always used and that their degree of use depends on task structure and internal task representation. Second, few tasks map unambiguously into the simple, narrow framework that is held up as the standard of good decision making. Third, the current approach is criticized for its failure to consider how the ambiguous, unreliable and unstable base rates of the real world should be used in the informationally rich and criterion-complex natural environment. A more ecologically valid research program is called for.

Keywords: Base rate fallacy, Bayesian, probability