The Cab accident problem: new insights into probabilistic reasoning when there is uncertainty about the witness reliability

One of the classic problems used to evaluate how well lay people perform probabilistic updating is the "Blue/Green Cab accident problem" (or equivalently with buses). The problem is usually expressed as follows:

 A cab was involved in a hit-and-run accident at night. Two cab companies, the Green and the Blue, operate in the city. 

90% of the cabs in the c…