Posted by: Gabriele Paolacci | October 8, 2009

Base rate fallacy

We submitted the “cab problem” from Kahneman and Tversky (1972) to sixty-six workers (66,7% women, mean age = 35.0). Participants were paid $0.05 for a HIT that comprised other unrelated brief tasks. People considered the following problem:

Two cab companies operate in a given city, the Blue and the Green. 85% percent of the cabs in the city are Blue, and the remaining 15% are Green.

A cab was involved in a hit-and-run accident at night. A witness later identified the cab as a Green cab.

The court tested the witness’ ability to distinguish between Blue and Green cabs under nighttime visibility conditions. It found that the witness was able to identify each color correctly about 80% of the time, but confused it with the other color about 20% of the time.

What do you think is the percentage that the errant cab was indeed Green, as the witness claimed?

79.0% of our participants stated a percentage higher than the normative 41% (median percentage=75%). Consistently with previous research (Bar-Hillel 1980),  the modal response was 80%. This shows that participants displayed the base rate fallacy, in that their assessments neglected the information on the cab distribution in the city.

References

Bar-Hillel, M. (1980). The Base Rate Fallacy in Probability Judgements. Acta Psychologica, 44, 211-233.

Kahneman, D., Tversky, A. (1972). On prediction and judgment. Oregon Research Institute Bulletin 12 (4).

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