The Analyst's Path

Glossary

Hindsight bias

M6.04

Also called hindsight, knew-it-all-along effect.

Remembering a past uncertainty as having been more predictable than it was.

It corrupts learning, because a decision that turned out badly is remembered as obviously wrong and one that turned out well as obviously right, when both may have been reasonable given what was known.

The only reliable defence is a contemporaneous record. A decision journal written at the time, stating the reasoning and the probabilities, cannot be revised by memory.

Judge the process from the record, not the outcome from memory.