Monthly Archives: January 2021

VICTIM OF THE HINDSIGHT BIAS

Hindsight is always 20-20. Are you often left with the feeling: “I had predicted this outcome, I wish the others had listened to me”. You might be a victim of the #hindsightbias.

If we look at the cause of the 2008 crash, several analysts will now say “the reasons were obvious“(in hindsight). However, very few people actually predicted the crash.

Experts claim today that the world was ripe for a #pandemic, given the way we live. NO one that I know of really thought anything like this was likely.

If someone unlikely cleared a set of competitive exams or didn’t clear them; there will be a host of people that will stake claim to the #prediction:

1. “I always knew he would make it” or 

2. “I knew he was a loser”

depending on which way the final outcome went.

This is dangerous. You feel you are a better predictor than you actually are. That can #distortdecision making.

How do we avoid the #hindsightbias?

Keep a diary. Write down which way you feel things are likely to go. Then compare it to the actual outcome!!!!!

Are people with biases, good or bad?

Most of us see ourselves as good people without biases. The reality however, is very different. People are good but have biases

Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations. Which is more probable?

1. Linda is a bank teller.

2. Linda is a bank teller and is active in the feminist movement.

#AmosTversky & #DanielKahneman in their landmark work in 1983 asked participants to solve this problem. More than 80% participants chose option 2, regardless of whether they were novice, intermediate or expert statisticians, even though the mathematical probability of Linda being both a bank teller and a feminist activist is much lower than the probability of her being a bank teller alone.

This example demonstrates how our brain makes connections where none exist: the #conjunctionfallacy.

We also have an #inherentbias that detailed statements are more likely than general ones.

There has been criticism on this problem. It remains one of the earliest & most well-known examples of the way our brain interprets information, makes connections & deduces things about people.