After knowing the outcome, a person will exaggerate the extent they predicted the outcome. Hindsight bias involves revising the probability of an outcome after the fact. Once a situation has occurred hindsight bias can make that event seem more obvious and predictable than was actually the case at the time. Hindsight bias is a form of cognitive bias / cognitive distortion. First, remind yourself that you can’t predict the future.Many pundits have claimed that stock market meltdowns like the dotcom bubble and global financial crisis of 2008 could have been predicated based on stock valuations. Hindsight bias is a psychological trait which leads to investors overestimating their predictive abilities. People tend to judge a critical situation much more accurately in hindsight than they would have beforehand. Hindsight bias: Hindsight bias describes the judgement error people make when looking back on a situation. Students might assume that they could predict the questions and answers on exams, which can affect how much effort they devote to studying.ĭefinition. What are some examples of hindsight bias?Įxamples of the hindsight bias include a person believing they predicted who would win an election or sporting event. It is colloquially known as the “I knew it all along phenomenon.” Related Topics: bias. Hindsight bias, the tendency, upon learning an outcome of an event-such as an experiment, a sporting event, a military decision, or a political election-to overestimate one’s ability to have foreseen the outcome. What is the difference between misinformation effect and hindsight bias?.What is hindsight bias and how can you avoid it?.How does hindsight bias affect research?.What are some examples of hindsight bias?.
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