THE BASE RATE FALLACY MYTH
Target Article by Koehler on Base-Rate

Abstract

We have been oversold on the base rate fallacy in probabilistic judgment. First, few tasks map unambiguously into the simple, narrow framework that is held up as the standard of good decision making. Second, the literature does not support the widely held belief that people ignore base rates. Third, we know very little about how the ambiguous, unreliable and unstable base rates of the real world are and should be used by decision makers who have complex performance goals. It is suggested that the existing research paradigm be replaced by an empirical program that examines real world base rate usage and embraces more flexible standards of acceptable performance.

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