Hindsight bias is one of the most seductive, influential and damaging cognitive traps. Research suggests that we’re susceptible to judging past events as more likely than they actually were. The feeling often grows stronger with time. This largely unrecognized mental maneuver can undermine judgement and decision-making, particularly during periods of change and uncertainty. Its influence can be disastrous for negotiators[1], executives and policy makers. If you are a leader and decision-maker, it is a foregone conclusion that you have been, are and will be affected by this trap—you cannot avoid it. Fortunately, you can tame its damaging influence.
The influence of history and hindsight were palpable during the Iran nuclear negotiations. I researched the implications and published the results in Going Nuclear: the influence of history and hindsight on the Iranian Nuclear Negotiations.
Hindsight bias, also known as creeping determinism, is a process whereby our knowledge of how events turned out influences our perception of their past and present probabilities. For example, consider a country government trying to prepare for future natural disasters. They hire experts from a nearby university to conduct a study and identify the most significant threats. They also want to know how likely they are to occur over the next ten years. The study identifies three potential disasters and their probabilities: drought and related wildfires (45%), earthquake (40%) and flooding aggravated by local dam failures (15%).
Government officials use the study to prioritize disaster prevention funding to fire prevention and strengthening infrastructure. Flood prevention will be addressed later. Two years after their decision, unusually strong rains cause rivers to crest and flood. Small flood control dams fail as predicted by the report. The damage is extensive. Residents and government officials then start reconsidering the odds assigned to a flood event. It will feel like a flood had been much more likely all along and that another flood is also probable. Creeping determinism will set in and with time more people will conclude that the flood had been predictable and probably preventable.
These feelings and false conclusions are triggered and sustained by hindsight bias. They are intense and can override reason among residents and government officials[2]. A common response is to shift disaster prevention and response funding from higher probability events to the type that affected the area. The reality is that lower probability events happen all the time – they just don’t happen as often as higher probability events. By shifting funding from higher to lower probability threats, local and State governments are responding politically rather than practically. Their actions will increase the odds of widespread damage from a different, higher probability catastrophic event.
There is extensive multidisciplinary research on the damaging effects of hindsight bias. It includes foundational studies by the team of Amos Tversky and Daniel Kahneman[3], and research by Baruch Fischhoff of Carnegie Mellon/Hebrew University of Jerusalem[4]. I’ve recognized these influences in my own work and research in areas like information security and terrorist threat assessments. In response, I developed and applied various tactics and methods to protect the objectivity of my investigations and quality of my work.
Implications
The bad news about biases is that we can’t avoid their effects, even when we are aware of their presence. The good news is that proven tactics can be integrated into our decision-making strategy to keep them in check. It’s also important to recognize their influence on others, particularly during negotiations with adversaries[5]. Biases like hindsight, confirmation and framing help create barriers to thoughtful analysis and understanding. It may fall on those who recognize their influence to help negotiating partners overcome these barriers. In this context, we can recognize that, while we can’t eliminate biases and their effects, we can still manage their influence and avoid tripping over the past on our way to the future.
References
[1] Ozzie Paez, Going Nuclear: the influence of history and hindsight on the Iranian nuclear negotiations, 2015, https://www.ozziepaezresearch.com/books
[2] Dave Smith, Why We Won’t Learn From Virginia Tech: The Problem with Hindsight Bias, August 6, 2007, Policeone, http://www.policeone.com/school-violence/articles/1473536-Lessons-learned-at-Virginia-Tech-shooting/
[3] Amos Tversky, Daniel Kahneman, Judgment Under Uncertainty: Heuristics and biases, September 27, 1974, pages 1124–31, Science.
[4] B. Fischhoff, Hindsight ≠ Foresight: The Effect of outcome knowledge on judgment under uncertainty, August 2003, Pages 304-312, Quality & Safety in Healthcare, http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1743746/
[5] Ozzie Paez, Going Nuclear.