Hindsight Bias

The hindsight bias can have a negative influence on our decision-making. Part of what goes into making good decisions is realistically assessing their consequences. It can lead to an overconfidence in our ability to predict these consequences. If we look back at past decisions and conclude that their consequences were indeed known to us at the time (when they weren’t), then it makes sense that we will overestimate our ability to foresee the implications of our future decisions. This can be dangerous, as our overconfidence may lead us to take unnecessary risks.¹ Think of a gambler who looks back at past losses as predictable, making him increasingly confident that his next trip to the casino will be successful.

This bias can have troubling implications across different academic and professional areas. The accurate study of past historical and political events or trends may be tainted if researchers are unable to put themselves in the shoes of decision-makers at the time -- who’s decisions were not informed by the foresight we have studying them in retrospect. This can cause details that seem obvious after-the-fact to be overlooked. Law, insurance, and finance all rely on realistic risk assessments based on similar past events. The bias can distort these predictions.

The hindsight bias happens when new information surrounding a past experience changes our recollection of that experience from an original thought into something different.² According to psychological scientists Neal Roese and Kathleen Vohs, there are three stacking levels on which this can occur.

The first level is “memory distortion.” This involves misremembering a past judgment or opnition. We often do this when claiming we said something when we didn’t. The second level is centered around our belief that a past event was inevitable. Roese and Vohs call this degree of hindsight bias “inevitability.” The last level, “foreseeability,” entails believing that we could have foreseen the event.³ So, the bias occurs when we misremember our past thoughts, think a past event was inevitable, and subsequently, believe the event was foreseeable.

From their review of existing literature on hindsight bias, Roese and Vohs conclude that there are three main sorts of variables that affect the three levels of hindsight bias to create our tendency of overestimating our predictive abilities:

1. Cognitive: We often distort their memory of past events by selectively remembering information that confirms what we already now know to be true. We do this to create a story that makes sense with the information we already have in what’s known as “sensemaking.” This is related to confirmation bias.
2. Metacognitive: Metacognition is when we think about our thoughts themselves. When people find it easy to think and understand a past judgement or event (an earlier thought), they can confuse ease with certainty. It is often easy to understand how or why an event happened in retrospect, due, at least in part, to the availability heuristic. This makes us certain that it is an understanding we had before.
3. Motivational: It brings us comfort to think that the world is orderly and predictable. This can motivate us to see unpredictable events as predictable. It also feels nice to think that your predictions were right or that you “knew-it-all-along” even if you might not have. Research shows that our actions are often subconsciously motivated to promote a positive view of ourselves.^4,5

It is important that we are aware of the implications it can have in our lives. As mentioned earlier, the overconfidence it often produces can have damaging implications. An essential part of making good decisions in our personal and professional lives is having realistic predictions about the future. The hindsight bias gets in the way by distorting the internal track-record we have of our past predictions. This can lead to overly confident future predictions that justify risky decisions with bad outcomes.

More broadly, the bias prevents us from learning from our experiences. If we already feel that we knew something all along, it is unlikely that we will carefully reflect on its outcome, and it will certainly prevent us from understanding why our predictions at the time might have been wrong. Ultimately, this can prevent us from understanding the true nature of an event or from identifying issues in how we make predictions.

One way that Roese and Vohs suggest counteracting hindsight bias is to consider and explain how the outcomes that did not unfold could have unfolded. By mentally reviewing all the potential outcomes, an event will seem less inevitable and foreseeable. However, Roese and Vohs note that we should not look to consider an overwhelming number of alternative outcomes, as the decision-maker could misinterpret this difficulty as an indication of their implausibility rather than their sheer number.⁶

Another way of addressing dangerous overconfidence is to keep track of your past decisions and their associated predictions. This can be done in what’s known as a “decision journal,” which is similar to a diary but details your decisions and what you were thinking when you made them.⁷  Having an unalterable track record of the predictions associated with your decisions (which will surely show some false predictions) might prevent the mistake of thinking you always ‘knew it all along.’

While the “knew it all along” phenomenon is not new, its formal scientific study started in the early 1970s. Motivated by the seminal work of his supervisors, Daniel Kahneman and Amos Tversky, on heuristics, Baruch Fischhoff was the first to study hindsight bias experimentally. He was motivated by an article by Paul Meehl on doctors exaggerating their feeling of having known all along how their patient cases were going to turn out.

Interested in the phenomenon and its application to the predictability of political events in hindsight, Fischhoff joined with researcher Ruth Beyth-Marom to test the hypothesis in 1975. To do this, Fischhoff and Beyth asked participants to predict how likely the various outcomes to then US President Nixon’s upcoming trip to China and the Soviet Union were.

Once Nixon had finished the trip, Fischhoff and Beyth asked participants to recall their initial predictions. The results showed that participants did not stick to the predictions they made before the trip, but instead gravitated towards the real outcomes of the trip. In other words, they recalled their predictions differently, favouring outcomes they knew were true in retrospect. This study inspired a broader scientific inquiry into the hindsight bias.⁸

It is not uncommon to hear people claim that they predicted the outcome of political elections. Researchers Dorothee Dietrich and Matthew Olson conducted a study in 1993 to evaluate the extent to which voters alter their predictions following an election.

Dietrich and Olson asked 57 college students at Hamline University to predict how the U.S. Senate would vote on the confirmation of Supreme Court nominee Clarence Thomas. More specifically, participants were asked to predict the outcome of the vote, how it would be split between parties in the Senate, and to indicate how confident they were in their prediction. A month after the vote, participants were then asked to recall their predictions and level of confidence.⁹

The results supported the influence of the hindsight bias: before the Senate vote, 58% of students predicted that Thomas would be confirmed. But when students were questioned after the successful confirmation, 78% of them claimed that they thought Thomas would be approved.¹⁰

In both the court of law and public opinion, hindsight bias may have a role to play in ‘victim-blaming.’ As mentioned above, part of the reason why the bias arises is that we often look for the easiest explanations and predictions in order to quickly make sense of the world. It is easier to focus on individuals and their actions over more nuanced, systemic causes. It is also easy to form and support predictions for events that have already occurred.

This may explain the prevalence of ‘victim-blaming’ in cases involving sexual assault. Victims of such cases or ‘survivors’ are often blamed for their affliction using the rationale, ‘they should have known better’ in retrospect. Indeed, studies have shown that this bias contributes to victim derogation in rape cases.

What it is

Hindsight bias is our tendency to look back at an event that we could not predict at the time and think the outcome was easily predictable. It is also called the ‘knew-it-all-along’ effect.

Why it happens

Firstly, we often distort their memory of past events by selectively remembering information that confirms what we already know to be true. This is done to create a story that makes sense with the information we already have in what’s known as “sensemaking.” Secondly, when people find it easy to think and understand a past judgement or event (an earlier thought), they can confuse ease with certainty. It is often easy to understand how or why an event happened in retrospect. This makes us certain that it is an understanding we had before. Thirdly, it brings us comfort to think that the world is orderly and predictable. This can motivate us to see unpredictable events as predictable. Lastly, It feels good to think that you “knew-it-all-along” even if you might not have.

Example #1 - Political predictions

People often claim that they predicted the outcome of political elections. A 1993 study asked college students to predict how the U.S. Senate would vote on the confirmation of a Supreme Court nominee. A month after the vote, participants were then asked to recall their predictions and level of confidence. Results supported the influence of hindsight bias: before the Senate vote, 58% of students predicted that Thomas would be confirmed. But when students were questioned after the successful confirmation, 78% of them claimed that they thought Thomas would be approved.

Example #2 - Blaming victims

Hindsight bias may have a role to play in the ‘victim blaming’ prevalent in sexual assault cases. Part of the reason why hindsight bias arises, is that we often look for the easiest explanations and predictions in order to quickly make sense of the world. It is easier to focus on individuals and their actions over more nuanced, systemic causes. It is also easy to form and support predictions for events that have already occurred. This may be why sexual assault victims or ‘survivors’ are often blamed for their affliction using the rationale, ‘they should have known better’ in retrospect. Research suggests that hindsight bias contributes to victim derogation in rape cases.

How to avoid it

One strategy is to consider and explain how the outcomes that did not unfold could have unfolded. By mentally reviewing all the potential outcomes, an event will seem less inevitabile and foreseeable. Another way of addressing the dangerous overconfidence that hindsight bias can result in, is to keep track of your past decisions and their associated predictions. Having an explicit and unalterable track record of the predictions associated with your decisions (which will surely show some false predictions) might prevent the mistake of thinking you always ‘knew it all along.’