Experts use base rates in real-world sequential decisions

Abstract

Human behavior is often assumed to be irrational, full of errors, and affected by cognitive biases. One of these biases is base-rate neglect, which happens when the base rates of a specific category are not considered when making decisions. We argue here that while naïve subjects demonstrate base-rate neglect in laboratory conditions, experts tested in the real world do use base rates. Our explanation is that lab studies use single questions, whereas, in the real world, most decisions are sequential in nature, leading to a more realistic test of base-rate use. One decision that lends itself to testing base-rate use in real life occurs in beach volleyball-specifically, deciding to whom to serve to win the game. Analyzing the sequential choices in expert athletes in more than 1,300 games revealed that they were sensitive to base rates and adapted their decision strategies to the performance of the opponent. Our data describes a threshold at which players change their strategy and use base rates. We conclude that the debate over whether decision makers use base rates should be shifted to real-world tests, and the focus should be on when and how base rates are used.

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