Looking Backward and Forward on Hindsight Bias

Abstract

The same event that appeared unpredictable in foresight can be judged as predictable in hindsight. Hindsight bias clouds judgments in all areas of life, including legal decisions, medical diagnoses, consumer satisfaction, sporting events, and election outcomes. We discuss three theoretical constructs related to hindsight bias: memory, reconstruction bias, and motivation. Attempts to recall foresight knowledge fail because newly acquired knowledge affects memory either directly or indirectly by biasing attempts to reconstruct foresight knowledge. On a metacognitive level, overconfidence and surprise contribute to hindsight bias. Overconfidence in knowledge increases hindsight bias whereas a well-calibrated confidence reduces hindsight bias. Motivational factors also contribute to hindsight bias by making positive and negative outcomes appear more or less likely, depending on a variety of factors. We review hindsight bias theories and discuss three exciting directions for future research.