DART research featured at the FUR2016 Conference

Egle Butt, one of the DART research student will present new findings from her PhD work in one of the parallel sessions of the FUR2016 Conference entitled: Risk attitudes I.

When Are Severe Outcomes More Probable? – The Role of Base Rate

WHEN

Tuesday, 28 June 2016 from 11:00 to 12:30 (BST)

WHERE

Warwick University – Coventry, CV4 7AL

Abstract

Communicating risk of uncertain outcomes (e.g., court sentence) often involves probabilities. People prefer to receive probabilistic information numerically (e.g., there is 70% chance that your case will not end in your favour), but they prefer to express it verbally (e.g., it is likely that your case will not end in your favour) (Erev & Cohen, 1990). Consequential decisions (e.g., should I take the plea bargain?) thus require an adequate interpretation of verbal probabilities. Some research suggests that severe outcomes trigger higher probability estimates (Harris & Corner, 2011) whereas other line of research suggests that higher base rates inflate probability (Fisher & Jungermann, 1996). A critical challenge in risk perception research is that severity and base rate are natural confounds. To draw any robust conclusions about the severity bias we need to test the effect of outcome severity while also controlling for its base rate.

In three experiments we tested how severity and base rate of a court sentence may influence the perceived probability of suspect’s conviction. In a 2(base rate: low vs. high) × 2(severity: low vs. high) between-subjects design, we manipulated base rate by describing the sentencing in similar cases as low or high and severity by describing the corresponding sentences as mild or severe. Participants then provided a numerical estimate for the lawyer’s statement: “it is possible that you will be convicted”.
The effect of severity on probability was not moderated by base rate in Experiment 1 (β3 = -.53, p = .94, 95% CI [-13.62, 12.57]) nor in Experiment 2 (β3 = -5.85, p = .25, 95% CI [-15.94, 4.24]), but it was moderated by base rate in Experiment 3 (β3 = -13.03, p = .03, 95% CI [-24.83, -1.24]). Conditional effects confirmed that the severity effect occurred at low levels of base rate (β = 10.66, p = .01, 95% CI [2.13, 19.19]). When meta-analysed, we found a significant severity effect in a low base rate condition (g = 0.29, p = .03, 95% CI [.04, .53]) and non-significant severity effect in a high base rate condition (g = -.03, p = .77, 95% CI [-.26, .19]). Moderated meta-analysis of the three experiments showed that the overall moderation effect of base rate was not significant (QM (df = 1) = 3.75, p = .05).

In three experiments we showed that participants were not susceptible to the severity bias when estimating risk of uncertain events. Instead they used base rate as a primary tool for their judgment. Experiments 1 and 2 showed that the severity effect on probability perception was independent of base rate, whereas Experiment 3 showed that the severity effect occurred at low levels of base rate. Moderated meta-analysis model of the three experiments reached marginal significance, suggesting that the severity bias may emerge at low levels of base rate. These findings lend support to the asymmetric loss function account (Weber, 1994), but offer to re-examine the assumption that the severity bias occurs independent of its base rate.