In the beginning of a relationship, our judgment can be clouded by hope and hormones. Unfortunately, when it comes to relationships, finding the right one can involve going through a long list of “not the right one.” This is just part of the journey. “I knew he was trouble,” or “I tried to tell you she was bad news,” are words we have all heard before. Claiming that you knew it all along is a way to be right, even when you were wrong. If the recent hire works out well, then the HR guru will conclude “My gut told me they were right for the job.” On the other side of the coin, if the person didn’t work out, the HR manager might say “Well, I had a bad feeling about that person all along.”Įither way, the blow of making a bad decision can be softened by using the hindsight bias. You just never know.Īfter three months on the job, the person hired may be great, or, they may be a complete train-wreck. Lots of resumes may look good and many candidates can perform well in an interview.īut at the end of the day, it is still a gamble. The HR department of any company faces the tough task of hiring. Of course, statements like that are not going to make anyone feel good, except for the person that said it. The first words out of the mouth of some might very well be, “I knew it was going to go down.” Many opinions are expressed, some for and some against certain stocks.Īfter the team has selected a few stocks to invest in, then spent a couple of million to buy a bunch of shares, if one fails, you will likely see a range of reactions, including the hindsight bias.
For example, there may be a group meeting to discuss potential buys.
Hindsight bias examples professional#
It is no wonder that people in this profession have a lot of stress.Īs in other industries, professional stock brokers also exhibit hindsight bias. It can be a real blow to one’s confidence and bank account. Predicting the Stock Marketīeing wrong about stocks can be devastating. Examples exist for trivial events, such as if it will rain or not, to significant historical events involving economics and wars. Hindsight bias is so prevalent you can see it happen nearly every day. No one likes to look bad, so saying that we knew something was going to happen helps restore our self-esteem. This is a way of restoring cohesion to a world that is sometimes unstable. Hindsight bias is an implicit cognitive bias that occurs when people overestimate their ability to predict outcomes, after the fact.įor example, although someone may make a prediction, when that prediction fails to materialize, they are likely to say that they “knew it all along.” Dave Cornell (PhD) Definition of Hindsight Bias
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