Evidence favors the nested sets hypothesis, introduced by fuzzy-trace theory (FTT) in the 1990s to explain effects and extended to many tasks, including conjunction fallacy, syllogistic reasoning, and base-rate effects (e.g., Brainerd & Reyna 1990; Reyna 1991; 2004; Reyna & Adam 2003; Reyna & Brainerd 1995). Crucial differences in mechanisms distinguish the FTT and Barbey & Sloman (B&S) accounts, but both contrast with frequency predictions (see Reyna & Brainerd, in press).

The phenomenon of base-rate neglect has elicited much debate. One arena of debate concerns how people make judgments under conditions of uncertainty. Another more controversial arena concerns human rationality. In this target article, we attempt to unpack the perspectives in the literature on both kinds of issues and evaluate their ability to explain existing data and their conceptual coherence. From this evaluation we conclude that the best account of the data should be framed in terms of a dual-process model of (...) judgment, which attributes base-rate neglect to associative judgment strategies that fail to adequately represent the set structure of the problem. Base-rate neglect is reduced when problems are presented in a format that affords accurate representation in terms of nested sets of individuals. (shrink)