The Birth of a Bias

Humans have likely fallen prey to hindsight bias since we climbed down from trees. There are deeply rooted biological benefits to cognitive and behavioural trade-offs that have benefited us over the 2M+ year evolution of our species. However, our understanding of it was developed 1970s when psychologists put a name to this mental misstep. Baruch Fischhoff, a psychology graduate student, coined the term “hindsight bias” after conducting several clever experiments.

Fischhoff’s research was inspired by an observation from Paul E. Meehl about clinicians overestimating their predictive abilities. Baruch Fischhoff’s groundbreaking experiment in the early 1970s involved asking participants to predict outcomes of uncertain events, such as President Nixon’s visits to China and the Soviet Union. They later recall their initial predictions after learning the actual outcomes. The study revealed that participants consistently overestimated the likelihood of outcomes that had occurred, demonstrating a cognitive distortion where people believe they “knew it all along”. This phenomenon, which Fischhoff initially termed “creeping determinism”, later became known as hindsight bias. It highlighted how outcome knowledge can significantly distort memory and judgment, leading to an inflated sense of predictability for past events.

Hindsight Bias in Action

Hindsight bias isn’t just a quirky psychological phenomenon; it has real-world implications across various domains:

In the Stock Market: After a market crash, many investors might claim they saw it coming. “I knew those tech stocks were overvalued!” they might say. But if they knew, why didn’t they sell before the crash? Hindsight bias can lead to overconfidence in investment decisions, potentially resulting in riskier future choices.

In Politics: Following an election, people often adjust their predictions to match the results. “I always knew Candidate X would win,” they might say, even if they were uncertain or predicted differently before the election. Has that happened to someone you know recently?

In Medicine: Physicians might recall clinical trial results as being more predictable than they were. This can affect how they interpret and apply medical research in practice, potentially influencing patient care.

In Legal Judgments: Jurors in court cases can be influenced by hindsight bias, potentially affecting their judgments of negligence or culpability. Knowing the outcome of a situation can make it seem like it should have been evident to those involved at the time.

In Event Design: Event owners and planners might over or under-predict session interest and have rooms overflowing while others are empty. Stating after they knew that topic was/wasn’t popular. They might under-communicate venue details with attendees before the event and then state they knew the venue was challenging to navigate after they saw the chaos onsite.