Illusory correlations in perceptions and predictions of organizational traits


  • Colin Camerer

    Corresponding author
    1. University of Pennsylvania, U.S.A.
    • Department of Decision Sciences, Wharton School, University of Pennsylvania, Philadelphia, PA 19104, USA
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    • Ph.D. at the University of Chicago Graduate School Business in 1981. He taught at Caltech and at Northwestern University' Kellogg Graduate School of Management, and is currently teaching decision sciences at the Wharton School. His research is mostly experimental tests of models of rational behavior in decisions, games and markets.


People often believe in ‘illusory’ correlations between variables that are similar, but not actually correlated. This study suggests that judgments of organizational traits reflect illusory correlations, because subjects' perceptions of correlations between traits, and the predictions of Hage's (1965) ‘axiomatic’ theory, were more highly correlated with independent similarity ratings than with actual correlations between traits. Some methodological reasons why organizational-trait theories might unwittingly produce illusory correlation predictions are discussed, along with possible remedies.