The New York Times ran a fun and politically timely article this week on hindsight bias — our personal belief after an event (like, say, a presidential election) that we had known and predicted with remarkably detailed precision (“295 electoral college votes!”) before the event how it would turn out.
Even if we hadn’t actually believed — much less said — anything of the kind.
As Times reporter Benedict Carey points out, there’s going to be a lot of evidence of hindsight bias — on cable TV and off — after Tuesday’s election results are tallied. “Many people will feel in their gut that they knew the result all along,” he writes. “Not only felt it coming, but swear they predicted it beforehand — remember? — and probably more than once.”
In his article, Carey mentions a recent review paper on the topic of hindsight bias authored by Neal Roese, a professor of marketing at the Kellogg School of Managemnt at Northwestern University, and Kathleen Vohs, a marketing professor at the University of Minnesota’s Carlson School of Management.
In their paper, published in the September issue of Perspectives on Psychological Science, Roese and Vohs offer this explanation of the phenomenon:
Hindsight bias is defined as the belief that an event is more predictable after it becomes known than it was before it became known. For example, a voter might believe that after accepting the Democratic nomination for president in August 2008, Barak Obama’s chances of winning the U.S. presidency was about 60%. After Obama’s victory in November 2008, this same voter might look back, see the victory as more predictable than it was before the outcome was known, and conclude that Obama’s chances were at least 80% at the time of the convention.
Hindsight bias is sometimes dubbed the “knew it all along effect,” the professors add, and involves “the inability to recapture the feeling of uncertainty that preceded an event.”
Common — and often unavoidable
Don’t think you can avoid it. “Even after it has been explained to you 100 times, you can still fall prey” to the bias, one expert told Carey. “Indeed, even after you’ve written about it 100 times.”
And hindsight bias has been studied and written about a lot. In fact, it’s been the subject of more than 800 academic papers, in large part because it is so common and universal.
“Hindsight bias is evident in people around the world and among both the young and old [and] has been has been documented in diverse domains, including labor disputes, terrorist attacks, medical diagnoses, consumer satisfaction, managerial choice, accounting and auditing decisions, business startups, athletic competition, public policy, and political strategy,” Roese and Vohs point out in their paper.
In his Times article, Carey gives this example of one of those 800 studies, which was conducted during the Clinton administration:
[T]wo psychologists at Loyola University in Chicago had 34 students predict the likelihood that the president would be convicted in his impeachment trial. The students’ estimates ranged from about 50 percent 11 days before the decision to about 42 percent a few days before, as the news media were trending toward acquittal.
But 11 days after the Senate voted to acquit the president, the study found, the same students inflated their original estimates by about 10 percentage points. Their estimates of what a friend would have guessed showed no such inflation. The students identified themselves mostly as independents, with equal numbers of Republicans and Democrats.
What’s the source of hindsight bias? Roese and Vohs cite three psychological “inputs”:
- cognitive (“people selectively recall information consistent with what they now know to be true and engage in sensemaking to impose meaning on their own knowledge”);
- metacognitive (“the ease with which a past outcome is understood may be misattributed to its assumed prior likelihood”); and
- motivational (“people have a need to see the world as orderly and predictable and to avoid being blamed for problems”).
“What consciousness does is tell the most compelling story it can come up with,” Vohs told Carey. “That means to tell a neat story, where all the pieces fit together. This means that the past becomes a lot more ‘knowable’ than it was in reality, and hence hindsight bias.”
Potentially serious consequences
Understanding hindsight bias is important because it can have serious consequences on how people make decisions.
One consequence is myopia. By biasing us toward the incorrect cause of an event, our hindsight bias can interfere with our ability to learn from experience. “When people think myopically, we mean that they fail to perform a thorough search for explanations,” seizing instead on the first causal explanation that comes along, write Roese and Vohs.
“A result of myopia can be placing more blame on a particular individual than is warranted (e.g., “He should have known better!”),” they add. “For instance, a study of perceptions of a rape situation found that greater hindsight bias was associated with blaming the victim. Moreover, hindsight bias led to the belief that there was something deep and pervasive about the victim’s character that brought about the tragic outcome.”
Another consequence of hindsight bias is overconfidence. “[H]indsight bias may yield overconfidence that incites a reluctance to reassess one’s own past actions,” write Roese and Vohs. “Decision makers who feel that they ‘knew it all along’ will see little use in considering fresh ways to attack a problem.”
The danger of such overconfidence has been well documented, particularly in regards to financial matters. “In investment bankers, those who show greater hindsight bias also earn less than other,” Roese and Vohs point out. “In entrepreneurs, overconfidence breeds risky, ill-informed ventures that underperform in terms of return on investment.”
But no matter what the outcome, most people won’t stop believing that they knew what was going to happen all along — and why.
Just listen to the political pundits on Wednesday.