The Effect of On-the-Job Experience on Base-Rate Neglect: Evidence from Medical Professionals

Abstract

We study the effect of on-the-job experience on base-rate neglect, which is a common bias in assessing conditional probabilities. We do so by carrying out experiments with medical professionals, who are routinely exposed to conditional-probability problems in the form of diagnostic tests, and non-medical professionals, who are not. As such, medical workers with more years of experience will have had more exposure to base-rate type problems than non-medical workers with similar years of experience. We estimate the effect of on-the-job experience by comparing the answers of more or less experienced professionals in both the medical and non-medical domains. Though the incidence of the bias is high for both groups and all levels of experience, we find that more experienced medical workers (a) have lower rates of perfect base-rate neglect (i.e., completely ignoring the base rates), (b) provide more accurate posterior estimates, and (c) adjust their estimates more in response to changes in the base rates. We observe no such difference for non-medical workers. We conduct a number of robustness checks and consider possible mechanism, such as education, job or survey attrition, selectivity into medical professions, and experience with false positives. Our results suggests that on-the-job experience mitigates, but does not eliminate, base-rate neglect.

Keywords: medical decision-making, behavioral economics, experiment