Hindsight bias is a common “psychological blind spot” in our decision-making ability.

The amazing fourth-quarter comeback to win the football game…the friend who admits to cheating in his marriage…the quiet guy in accounting secretly embezzling funds. 

The situations may be different, but we hear ourselves say it over and over again: “I knew it all along.“

The reality? Too often, we actually didn’t know it all along, we only feel as though we did. This phenomenon is known as hindsight bias and it is one of the most widely studied psychological “blind spots” in our decision-making skills. Hindsight bias is quite common and has been documented medical diagnoses, accounting and auditing decisions, athletic competition, and political strategy.

Researchers Neal Roese (Northwestern University) and Kathleen Vohs (University of Minnesota) review the existing research on hindsight bias, exploring the various factors that make us so susceptible to the phenomenon and identifying a few ways we might be able to combat it. Their article can be found in the journal, Perspectives on Psychological Science.

Roese and Vohs discuss three levels of hindsight bias that can get us into trouble:

Level one is known as Memory Distortion. This involves misremembering an earlier opinion or judgment (“I said it would happen”). Level two involves the principle of Inevitability. This centers on our belief that the event was inevitable (“It had to happen”). And finally, level three involves Foreseeability – or the belief that we personally could have foreseen the event (“I knew it would happen”).

Why does hindsight bias happen in the first place?

The researchers argue that certain factors fuel our tendency toward hindsight bias. Research shows that we selectively recall information that confirms what we know to be true and we try to create a narrative that makes sense out of the information we have. When this narrative is easy to generate, we interpret that to mean that the outcome must have been foreseeable. Furthermore, research suggests that we have a need for closure that motivates us to see the world as orderly and predictable and to do whatever we can to promote a positive view of ourselves.

Ultimately, hindsight bias matters because it gets in the way of learning from our experiences. “If you feel like you knew it all along, it means you won’t stop to examine why something really happened,” observes Roese. “It’s often hard to convince seasoned decision makers that they might fall prey to hindsight bias.”

Hindsight bias can also make us overconfident in how certain we are about our own judgments. Research has shown, for example, that overconfident entrepreneurs are more likely to take on risky, ill-informed ventures that fail to produce a significant return on investment.

While our inclination to believe “knew-it-all-along-thinking” is often harmless, it can have important consequences for the legal system, especially in cases of negligence, product liability, and medical malpractice. Studies have shown, for example, that hindsight bias routinely afflicts judgments about a defendant’s past conduct.

And technology may make matters worse. “Paradoxically, the technology that provides us with simplified ways of understanding complex patterns – from financial modeling of mortgage foreclosures to tracking the flow of communications among terrorist networks – may actually increase hindsight bias,” says Roese.

So what can we do about?

Roese and Vohs suggest that considering the opposite may be an effective way to get around our cognitive fault – at least in some cases. When we are encouraged to consider and explain how outcomes that didn’t happen could have happened, we counteract our usual inclination to throw out information that doesn’t fit with our narrative. As a result, we may be able to reach a more nuanced perspective of the causal chain of events.

Related Article: Why Do Some People Choke Under Pressure?

September 21, 2012
The Healthy Mind Network
 

Story Source: The above story contains original content and/or information reprinted and editorially adapted by The Healthy Mind. Material is provided by Northwestern University and Eurekalerts.

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