What Is Hindsight Bias? | Definition & Examples
Hindsight bias is our tendency to overestimate how predictable we thought an event was after it has happened. This can lead to overconfidence about our powers of judgment and cause us to make risky decisions or unfairly criticize the actions of others.
The coach of the team has decided to include a young player in the starting lineup.
Martin discusses this decision with his friend before the match. They agree that it is a bit risky because the young player is inexperienced, but it is good that he will be replacing a player who did not play well in the last match.
Martin’s team loses the match. At work on Monday, he discusses the result with one of his colleagues. Martin says that he knew his team would lose because the young player was too inexperienced.
Hindsight bias has made Martin think that he was certain that his team would lose. But in truth, he did not predict this with confidence.
Hindsight bias is also known as the “knew-it-all-along phenomenon.” It can lead us to wrongly believe that an outcome, such as a sports score, election result, or medical error, was more certain than it actually was.
What is hindsight bias?
Hindsight bias is a psychological phenomenon that leads us to wrongly conclude that a past event was more likely or inevitable than it actually was.
When making a prediction, we often consider a range of possibilities and are ultimately uncertain about what will actually happen. But once we know the outcome, hindsight bias—a form of cognitive bias—can make us convince ourselves that we had predicted it “all along.”
People are more susceptible to hindsight bias if the outcome is negative. This aligns with our tendency to focus on negative rather than positive outcomes (negativity bias).
If we find out that a couple we know has broken up, we might be inclined to think that we had “seen it coming,” for instance. But this feeling of inevitability could be the result of hindsight bias, which is causing us to reinterpret the couple’s past disagreements and behavior to agree with what we now know.
Hindsight bias examples
Research suggests that entrepreneurs may be particularly at risk of succumbing to hindsight bias.
When reflecting on failure, entrepreneurs may have a tendency to understate how optimistic they think they were at the beginning of a venture and overestimate the accuracy of their predictions. This could lead to bad decision making when it comes to the success potential of their future business ideas.
Hindsight bias needs to be taken into account when deciding if a doctor has acted negligently.
Five years later, they’re diagnosed with cancer. Their doctor says that he can see the tumor on the 5-year-old x-ray image, and that the doctor who examined it then should have detected it.
Unfortunately, the patient dies as a result of the disease. Their family decides to sue the first doctor for malpractice.
In court, an expert medical witness says that the tumor was obvious on the old x-ray. But the doctor’s attorney argues that he only thinks this because he now knows the exact location of the tumor.
The attorney is arguing that, with the information the expert has after the event, hindsight bias is making him overestimate the likelihood that a doctor could have detected the cancer.
Reasons for hindsight bias
Hindsight bias seems to occur when we attempt to make sense of an outcome. We reconstruct our narrative of what happened by focusing on certain things and ignoring others.
Psychologists have identified three levels of hindsight bias, which can occur on their own or in combination:
1. The memory distortion or “I said it would happen” level
Our memories become warped because it’s easier to recall our past opinions and judgments that agree with what actually happened rather than the ones that don’t. Knowing the outcome has made these memories more available to us and created an exaggerated perception of how likely we thought the outcome would be. Such memory distortions also play a role in the availability heuristic and confirmation bias.
2. The inevitability or “it had to happen” level
Bias creeps in due to our beliefs about the world in general and the reasons for an event. We prefer to believe that the world is an orderly rather than chaotic place. This motivates us to find cause-and-effect relationships when accounting for events, which is easy to do now that we have information about what actually happened.
3. The foreseeability of “I knew it would happen” level
With information about the actual outcome, it’s easy to make sense of what has happened. And because it seems so straightforward, we believe that we had this clarity of understanding before the event. This convinces us that we could have predicted it all along. This phenomenon is related to the availability heuristic.
Effects of hindsight bias
Hindsight bias can make us think that an outcome was much more predictable than it actually was—particularly that a negative outcome was easily avoidable. It can both help and hinder us.
- You won’t learn from a surprising event if you mistakenly feel you knew what the outcome would be “all along.” Instead of reflecting on your predictions and trying to understand why they were wrong, you move on and pass up a valuable opportunity to improve your decision making.
- Hindsight bias is a potential decision trap because mistakenly believing that you successfully predicted an outcome can lead to overconfidence. This can affect the quality of your decisions going forward.
- Hindsight bias may lead you to unfairly criticize other people’s actions and decisions because you think a certain outcome was easily predictable. But your judgment is being clouded by your interpretation of information that is only available after the event.
- Some psychologists think that hindsight bias happens because we need to be able to update our knowledge in order to prevent memory overload. This updating process also helps us draw better conclusions because it keeps our knowledge more coherent.
- Research has shown that the processes that help us make sense of past events involved in hindsight bias can ease emotional pain after a negative experience. This is because being able to tell yourself that you “knew it would happen” is comforting.
Ways of counteracting hindsight bias
Everybody is susceptible to hindsight bias because it is inherent to the way we think. But there are some things we can do to minimize it:
- Acknowledge the fact that everyone has biases, which means that you do too. Remind yourself that hindsight bias may be influencing the conclusions you draw when you’re reflecting on past events.
- You can document your predictions in a decision journal. Looking back on how accurate they were and the reasoning behind them can help guard against overconfidence and improve your future decision making.
- When thinking about how likely a particular outcome was, try and identify scenarios that could have led to alternative outcomes. Employing this “consider-the-opposite” strategy can reveal a range of possible narratives that reduce the biasing effect of knowing what actually happened.
Frequently asked questions about hindsight bias
- Why is hindsight bias a problem?
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Hindsight bias is problematic because it can make us unreasonably criticize the decisions and actions of others.
It can also cause us to overestimate how good we are at making decisions if we think that our predictions are more accurate than they really were.
- What is a real-life example of hindsight bias?
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A real-life example of hindsight bias is believing a test was easier than it actually was once we know the correct answers.
Imagine you are answering a multiple choice question and can’t really decide between two of the possibilities. You select one of them but are not very confident that it is correct.
The next day you find out the correct answer and think to yourself, “Yes! I knew that was the correct answer all along.”
Hindsight bias has made you overestimate your knowledge of what the question was testing.
- What is the difference between hindsight bias and confirmation bias?
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Hindsight bias and confirmation bias are two different types of cognitive bias that can lead to errors of judgment by influencing our perceptions.
Hindsight bias occurs when we feel that an outcome was more predictable than it really was. Once we know what actually happened, it becomes more difficult to recognise the possibility of alternative outcomes. The knowledge we have now makes us reflect on the past in a biased way.
Confirmation bias, on the other hand, occurs when we select and recall information through the filter of our personal values and beliefs. We are biased toward facts and explanations that agree with what we already believe to be true.
So, hindsight bias is a process that updates our past thoughts and beliefs on the basis of new information. But confirmation bias is a process that aligns our thoughts and beliefs to agree with what we already think.
- What is another term for hindsight bias?
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Hindsight bias is also sometimes referred to as “creeping determinism.” Another, more colloquial, term for it is the “knew-it-all-along phenomenon.”
