The use of base rate information as a function of consistency and utility
Dunwoody, Philip Thomas
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The use of base rate information has been widely studied in decision making with the conclusion that people underweight or ignore base rate information when compared to a normative standard. This work extends the current body of research by demonstrating that base rate usage is moderated by the statistical characteristics of the base rate information. Two studies demonstrated that experienced base rate consistency and utility both affect base rate usage. Experiment 1 showed that participants use base rate information more often when it is consistent than when it is inconsistent. Experiment 2 showed that when base rate consistency and utility are manipulated separately, participants decisions are mostly influenced by the utility of the base rates and not the consistency. These studies demonstrate that base rate usage can be an adaptive response to environmental contingencies.