The hindsight bias is a common cognitive bias that involved the tendency of people to see events, even random ones, as more predictable than they are.
Hindsight Bias or knew-it-all-along phenomenon; It is the tendency of people to look back on events and believe that we “knew it all along”.
Source: “I Knew It All Along…Didn’t I?’ – Understanding Hindsight Bias”. APS Research News. Association for Psychological Science. Retrieved 29 January 2019.
This tendency to is surprisingly prevalent.
Research suggests that the Hindsight Bias occurs due to the following three variables :
- Distortion or Misremembering the earlier prediction about the event.
- Tendency to view the event was to happen; inevitable.
- Assuming that events could have been foreseen prior to occurrence.
While watching a tense game between a league topper and a bottom rung team, somehow the underdogs holding on to a draw till the last minute, and suddenly one comes up with the remark, “I knew beforehand that the match will end in a draw.” Maybe in reality that person was thinking otherwise.
This leads to overconfidence, strong belief for success. It happens while investing in stocks and it leads to taking too much unnecessary risks.
Hindsight bias has been found to occur more likely when the outcome of an event is negative than positive, [Schkade, D.; Kilbourne, L. (1991). “Expectation-Outcome Consistency and Hindsight Bias”. Organizational Behavior and Human Decision Processes. 49: 105–123] a phenomenon consistent with the more general tendency for people to pay more attention to negative outcomes of events than positive ones. [Fiske, S. (1980). “Attention and weight in person perception: The impact of negative and extreme behavior”. Journal of Personality and Social Psychology. 38 (6): 889–906.]
Researchers Roese and Vohs suggest that one way to counteract this bias is to consider things that might have happened but didn’t. By mentally reviewing potential outcomes, people might gain a more balanced view of what really happened.