What is Hindsight Bias and How it Changes the Narrative?
Published by at July 3rd, 2023 , Revised On August 7, 2024
Life is uncertain. No one knows exactly what will happen next month or next year. People provide diverse perspectives on an event, even if they don’t know its outcome. After the event, everyone provides many reasons regarding the expected or unexpected outcome.
However, in some cases, when people say that they always knew this was going to happen, whether it was a good or bad outcome, this happens due to Hindsight Bias. This phenomenon significantly changes people’s narratives, no matter what their views were before the event.
When scientists claim that they always knew the outcome of a particular experiment, whether it was successful or not, this distorts their research process and leads to research bias. This blog discusses the concept of hindsight bias, its causes, and tips to avoid it.
What is Hindsight Bias?
Hindsight bias makes people think the outcome of an event is “predictable”. People usually don’t focus on their efforts to make an event more successful. But when something unexpected happens, they claim they always knew it was coming to make themselves long-sighted in front of the world.
Hindsight Bias Definition
According to psychology, hindsight bias is the tendency of people to refer to the happening of past events as more predictable than they actually were. It is also known to be as “knew-it-all-along” effect. This is a type of cognitive bias.
Hindsight bias also makes people regret when something bad happens. It makes them think they could’ve done better to make it better. Moreover, hindsight bias also makes people less critical and significantly impacts their decision-making.
Hindsight Bias Example
Imagine you’re watching a cricket match with your friends. The team you’re supporting is playing well at the start of the match, but there are also flaws in that game. On the other hand, when the opposing team starts batting, they begin with poor performance. But as the game continued, they increased their level of game.
When the match concluded, the opposing team won. This could be unexpected for you, but you instantly comment that you knew this would happen. The hindsight bias compels you to see the flaws in the game of the team you supported.
Hindsight Bias and Overconfidence
Hindsight bias also significantly causes people to have overconfidence. When people say they always knew it would happen, they overestimate their ability to predict the outcomes of future events.
Hindsight bias not only changes the narratives of the people but also influences their behaviours regarding a particular event. This causes them to make weak decisions, make faulty predictions, and suffer financial loss.
| Hindsight Bias | Outcome Bias |
|---|---|
| Hindsight bias is the tendency to refer to past events as being more predictable than they actually were. | Outcome bias is the tendency to refer to the quality of a decision according to its results. |
| It is known as the “knew-it-all-along” effect. | It is known as the “end justifies means” effect. |
| This is caused when someone evaluates the outcome of an event. | This is caused when someone evaluates the quality of the decision. |
| It focuses on the uncertainty and complexity of situations. | It focuses on the quality and consistency of the decisions |
What are the Causes of Hindsight Bias?
Even when an event is unexpected, people try to make sense of that event. Whether they know of the happening or not, they try to change the narrative by obsoleting all the initial remarks before the happening of the event. However, the causes of hindsight bias are given in the following:
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Need for Overestimation
The main cause of hindsight bias is the need for overestimation. People usually want to exaggerate their knowledge and skills when an event happens. They want to show they have more knowledge, which is how they knew it would happen. They even exaggerate their previous perspectives to make them relevant to the known results.
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Regeneration of Memory
When something unexpected happens, people try to obsolete all the known data and information about that event. Rather than focusing on the former knowledge, they prefer regenerating their memory. This distortion in the old information and regeneration of memory causes hindsight bias.
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Motivational Purposes
Motivation could also cause hindsight bias. When people exaggerate their information about an event and change it according to the present reality, they try to show themselves more foresighted and smart in front of the world. This pursuit of motivation causes them to commit hindsight bias.
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What are the Effects of Hindsight Bias?
When someone says that he/she knew the outcome of an event, this significantly impacts the whole truth about the outcome. However, here are the effects of hindsight bias:
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Distorts the Learning
When someone says that they knew it all along, they lose all chance to learn about the past, present, and uncertainty of the event. It makes it difficult for them to draw different conclusions from the past.
When hindsight bias is done in historical events, it significantly distorts the historical information.
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Influences Decision-Making
Hindsight bias also influences the decision-making of the people. When they claim that they knew this was how the event was going to end, they also change their past ideas and judgements related to the same topic. They also make the decisions according to their claims, which impacts their decision-making in the long run.
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Leads to Overconfidence
Hindsight bias significantly impacts people’s confidence and turns them into overconfident people. They start to believe that whatever they predict will come true. They also started to believe they had more knowledge and wisdom than others who were more aware of the event.
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Legal Consequences
Hindsight bias takes away their critical thinking. They become reluctant to analyse any situation efficiently. Their claim turns the outcome as “inevitable”. If there’s a negative outcome, they can easily blame others and pose particular legal challenges for them.
How to Avoid Hindsight Bias?
Hindsight bias is a psychological phenomenon that compels people to attribute their perspectives as superior to others. What they said is what the actual reality is. This causes various problems when evaluating situations efficiently. These are the tips you can follow to avoid hindsight bias:
Tip 1: Journal All Your Decisions
The first tip to avoid hindsight bias is to journal all your decisions. You should write down all the decisions you made from day one. Write about the causes and effects, problems and solutions. When something unexpected happens, it allows you to review your journal and significantly helps you overcome hindsight bias.
Tip 2: Memorise Your Original Judgements
Another tip to avoid hindsight bias is to memorise all your original judgements. When you memorise all your original judgements about a particular event, you can easily remind them after the event commences. It will significantly help you to avoid hindsight bias.
Tip 3: Examine Different Point-of-Views
According to research, it’s essential to examine and seek different points of view whenever you commit a bias. In the case of hindsight bias, you should know what could’ve happened instead of what has happened. When you examine different scenarios, you can see a clear picture of the story.
Hindsight Bias Examples
These are the examples of hindsight bias to help you better understand this concept:
Example 1: Hindsight Bias in Investment
Imagine you invest in a multinational firm and believe that its share value will increase in the coming days. But as the days approach, their value unexpectedly decreases. In that situation, you’ll claim that you had seen it coming and attribute this outcome to your knowledge and wisdom.
Example 2: Hindsight Bias in Relationships
Consider your friend’s breakup with her boyfriend. At the start of their relationship, everything was good and original. According to her, they were perfect for each other. But after the breakup, she may say there was always something off and that this relationship was going to fail no matter what she did.
Example 3: Hindsight Bias During Weather Predictions
Weather predictions are a famous example of hindsight bias. Even when there’s no sign of rain when it unexpectedly rains, news weather forecasters claim that they already knew this would happen.
Example 4: Hindsight Bias in Historical Events
Imagine an event that happens according to a historical event. All the important scenarios relate to the history. When someone claims that he/she already knew it to come out as a historical event, they will commit hindsight bias.
Frequently Asked Questions
Hindsight bias, commonly referred to as the “I-knew-it-all-along” effect, is the bias of people to regard an event as having been more predictable or foreseeable than they initially imagined it to be after it occurred.
These are the common causes of hindsight bias:
- Need for overestimation
- Regeneration of memory
- Motivational purposes
When an unexpected event happens, people change their narrative to comply with the new data and information. No matter what they have said in the past, it becomes obsolete with the event’s happening. They also claim that they knew it was coming to make themselves longsighted in front of the world.
